Wednesday, December 7, 2011

Gold may hit US$2,300 in 2012, say Dillon Gage Metals

KUALA LUMPUR (Dec 7): Gold can build on its 2011 gains next year with prices possibly touching US$2,300 an ounce, according to US-based Dillon Gage Metals.

In a statement Dec 6, Dillon Gage, an online gold trading platform, said that the price of gold had reached an all time high in September on the back of a turbulent year for world economies and markets.

Dillon Gage president Terry Hanlon said the yellow metal looks poised for loftier levels next year, adding that uncertainty about US, European and other economies would clearly keep investors interested in precious metals in 2012.

"Gold's long-term prospects remain strong as demand continues to rise, while growth in world supplies should remain limited." said Hanlon.

"Gold could reach $2,000 an ounce next year, and many traders are looking at $2,300, the metal's 1980, inflation-adjusted high, as a target," he added.

Hanlon said that gold was currently inching back up now and is US$350 an ounce above prices a year ago.

He added that precious metals traders were waiting for the European Union's Dec 9 summit meeting as it is expected to result in treaty changes that would affect currencies and other markets.

In the World Gold Council (WGC)'s most recent data, global 3Q11 investment demand for gold surged 33% to 468 tonnes.

Europe recorded a 135% increase or 118 tonnes in 3Q11 investment demand while the demand for gold bars and coins rose 29% to 391 tonnes from 303 tonnes a year ago.

The purchases of bars and coins totaled US$21.4 billion compared to US$12 billion in the corresponding quarter in 2010, it said.

Demand for gold has also increased due to major central banks replacing other reserves with gold, it added.

According to WGC data, global gold demand expanded 6% or US$57.7 billion, an all time high in value terms in 3Q11.

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