Gold may rise to US$500 an ounce for the first time since 1987 as investors purchase more bullion as a hedge against declining currencies, a survey shows.
Sixteen of 28 traders, investors and analysts surveyed from Sydney to Chicago on Nov. 17 and Nov. 18 advised buying gold, which rose US$16.80 last week to US$486.20 on the Comex division of the New York Mercantile Exchange. Prices are up 11 percent this year.
Gold sold in dollars gained against the major currencies last week, including a 3.5 percent increase in euros and 5 percent in the British pound. Gold rallied this year as mine output slowed, global jewelry demand rose and investors grew more concerned inflation would accelerate.
"Gold is trading like a currency," said Fulinda Malone-Rouse, business-development manager in New York for EBS Dealing Resources, a London-based spot market that handles US$120 billion in daily gold, silver andcurrency transactions. Trading is up 30 percent this year, and "we're seeing banks start to refocus on metals," Malone-Rouse said. "We're also seeing foreign-exchange traders trade gold."
Gold for December delivery rose 3.5 percent last week on the Comex, the biggest gain since August last year. The rally was anticipated by the majority of analysts surveyed Nov. 10 and Nov. 11.
"I can see gold going through US$500 an ounce in the very near future," Barrick Gold Corp chief executive Gregory Wilkins said in an interview. Since gold has traded above US$500 only "a handful of times," any return to that level may spur more demand, he said.
Investors also are being drawn to gold as a haven because of the threat to financial markets from avian flu in Asia, the war in Iraq and the riots in France's suburbs, traders and analysts said. Demand for gold coins, bars and bullion-backed shares rose 56 percent in the third quarter from a year earlier, led by a 38 percent gain in purchases in the Middle East, the producer-funded World Gold Council said Nov. 17.
"They see holding large amounts of currency as high-risk," said William O'Neill, a partner at Logic Advisors LLC, a commodity-consulting company in New Jersey.
O'Neill said gold will trade between US$520 and US$525 for the rest of the year, up from his previous forecast of US$485 to US$490. "This is the day of the hard asset."
Gold may also rise as central banks halt or slow a practice of selling precious-metal reserves and diversify out of dollar assets.
Russia's central bank may double its gold holdings to 10 percent of reserves from 5 percent, Maria Guegina, the bank's head of external reserves, said on Nov. 15. The central banks of South Africa and Argentina also said they may boost gold reserves.
"The markets work on fear and greed," Kevin McArthur, chief executive of mining company Glamis Gold Ltd, said. "The fear factor on central bankers is such that they are buying. That is a very positive thing that's happened in our industry."
Central banks, mainly in the US and Europe, hold almost a fifth of the world's gold as a reserve asset. In 1999, several European central banks agreed to limit their sales of bullion, to prevent price swings and make the market more transparent.
Investors may also buy gold to hedge against inflation, traders and analyst said.
European Central Bank president Jean-Claude Trichet said the bank is poised to raise interest rates for the first time in five years to stem inflation in the 12 euro nations. Bonds fell across the region. European inflation, which reached 2.5 percent in September from a year earlier, was 2.7 percent last year and 2.2 percent in 2003.
US consumer prices are rising at a 4.9 percent annual pace compared with a 3.7 percent increase at the same time last year, figures from the Labor Department showed.
"Inflation is real," McArthur said. "The flight to quality is to gold."
Some investors buy gold in times of inflation to preserve purchasing power. Gold surged to US$873 an ounce in 1980 when consumer prices jumped 12.5 percent. Gold reached a 16-year high of US$458.70 an ounce on Dec. 2 as US inflation jumped to 3.3 percent last year, from 1.9 percent in 2003.
"Gold will continue to climb higher over the coming months," said Stuart Flerlage, managing principal at Patronus Capital. "Investors recognize that everything they spend money on has become more expensive."
The Ministry of the Interior (MOI) is to tighten rules for candidates running for public office, requiring them to declare that they do not hold a Chinese household registration or passport, and that they possess no other foreign citizenship. The requirement was set out in a draft amendment to the Enforcement Rules of the Public Officials Election and Recall Act (公職人員選舉罷免法 ) released by the ministry on Thursday. Under the proposal, candidates would need to make the declaration when submitting their registration forms, which would be published in the official election bulletin. The move follows the removal of several elected officials who were
The Republic of China (ROC) is celebrating its 114th Double Ten National Day today, featuring military parades and a variety of performances and speeches in front of the Presidential Office in Taipei. The Taiwan Taiko Association opened the celebrations with a 100-drummer performance, including young percussionists. As per tradition, an air force Mirage 2000 fighter jet flew over the Presidential Office as a part of the performance. The Honor Guards of the ROC and its marching band also heralded in a military parade. Students from Taichung's Shin Min High School then followed with a colorful performance using floral imagery to represent Taiwan's alternate name
FOUR DESIGNATED AREAS: Notices were issued for live-fire exercises in waters south and northwest of Penghu, northeast of Keelung and west of Kaohsiung, they said The military is planning three major annual exercises across the army, navy and air force this month, with the navy’s “Hai Chiang” (海強, “Sea Strong”) drills running from today through Thursday, the Ministry of National Defense said yesterday. The Hai Chiang exercise, which is to take place in waters surrounding Taiwan, would feature P-3C Orion maritime patrol aircraft and S-70C anti-submarine helicopters, the ministry said, adding that the drills aim to bolster the nation’s offshore defensive capabilities. China has intensified military and psychological pressure against Taiwan, repeatedly sending warplanes and vessels into areas near the nation’s air defense identification zone and across
COVETED PRIZE: The US president would be a peace prize laureate should he persuade Xi Jinping to abandon military aggression against Taiwan, William Lai said US President Donald Trump should get the Nobel Peace Prize should he be able to convince Chinese President Xi Jinping (習近平) to abandon the use of force against Taiwan, President William Lai (賴清德) told a conservative US radio show and podcast in an interview. The US is Taiwan’s most important international backer, despite the absence of formal ties, but since Trump took office earlier this year he has not announced any new arms sales to the nation. Trump could meet Xi at the APEC summit in South Korea on Oct. 31 and Nov. 1. Lai, speaking on The Clay Travis and Buck Sexton
RSS