MUMBAI |
(Reuters) - Gold could hit $1,900 an ounce in the next six months, driven by buyers seeking an investment safe from global economic problems, but a further rise to $2,000 looks unlikely, metals consultancy GFMS said on Thursday.
"Gold will be muddling through to peak at $1,900 (an ounce) as U.S. data points have been ambiguous, the action on the fiscal and monetary front is also ambiguous," said Paul Walker, global head of precious metals at GFMS, which has been acquired by Thomson Reuters.
Gold extended record highs above $1,825 an ounce on Thursday after poorly received U.S. jobs data hurt assets seen as higher risk, such as stocks, while boosting interest in nominal safe havens such as gold.
So far in August, the price has risen by more than 12 percent, putting it on track for its biggest monthly gain since November 2009.
"In the time frame, we really need exceptionally dramatic news to push gold above $2,000 and this is not our base case," said Walker. "This is highly unlikely."
Although gold remains off its inflation-adjusted peak above $2,000 struck in 1980, it is one of the top performing assets this year, up by over 28 percent versus a 15-percent loss in U.S. blue-chip stocks or a 7.7-percent decline in the price of copper .
He said there was a high probability of India's gold imports crossing 1,000 tonnes this year -- up four percent on 2010 -- as expectations were for prices to gain further.
The World Gold Council in a report on Thursday said Indian gold jewellery buying was up 17 percent in the second quarter and that signs of strength in the market remained.
Gold imports by MMTC, India's second biggest importer of the metal, have tumbled to 5 tonnes so far in August as buyers preferred a 'wait-and-watch' approach. Walker said consumers would wait for price stability before jumping in.
"People are getting accustomed to this kind of a benchmark (price) even though it is at incredibly elevated levels. Everybody who is involved in the value chain in the Indian gold market thinks prices will go up," said Walker, ahead of a conference in Kerala.
Silver prices could extend gains to $50 an ounce in the next months from around $40.60 an ounce now, he added.
"It will follow gold up ... It will move towards $50, but it is going to be a hell of a lot more volatile," said Walker.
Silver prices have more than trebled since 2008 to peak at $49.51 an ounce this year.
"Silver will benefit from the same factors as that of gold from rising investment drivers. Until the global macro situation gets clearer, prices will go higher," he said.
(Editing by Anthony Barker)
Source: http://in.reuters.com/article/2011/08/18/idINIndia-58854820110818
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