Thursday, September 30, 2010
Gold Forecast Over $1,450/oz as Implications of Competitive Currency Devaluations Assessed
From Gold Core:
Gold has remained well bid above the $1,300/oz level and silver has risen another 0.7% and looks set to challenge the $22/oz level. Participants at the LBMA conference see gold rising to over $1,450/oz over the next year due to concerns about central banks' reaction to the economic crisis. LBMA delegates forecast silver to trade at $24/oz in 12 months time which it is a conservative estimate given the very strong technical and fundamental situation.
Gold is currently trading at $1,308.98/oz, €961.14/oz, £829.10/oz.
Silver looks very well technically and the gold/silver ratio has fallen to below 60 (59.84 - 1308/21.86) with 55 and 50 looking potential targets in the coming months. The relative undervaluation of silver to gold and the fact that it remains less than half of its (nominal) record price in 1980 is leading to strong demand for silver internationally and in Asia particularly. A period of high inflation or stagflation as was seen in the 1970s would again be bullish for silver and it would likely again outperform gold.