Daily News Egypt

Forecasts say gold prices will continue to rise - Daily News Egypt

Advertising Area



Advertising Area




Forecasts say gold prices will continue to rise

CAIRO: If you are seeking an alternative route to investment other than the stock market, you should consider picking up bits of gold ore to later turn into cash after the yellow metal firmed on Thursday and HSBC upped 2009 and 2010 gold forecasts on haven buying. Though gold heavily fluctuated this week, experts say …


CAIRO: If you are seeking an alternative route to investment other than the stock market, you should consider picking up bits of gold ore to later turn into cash after the yellow metal firmed on Thursday and HSBC upped 2009 and 2010 gold forecasts on haven buying.

Though gold heavily fluctuated this week, experts say the direction in which it is moving is mostly up. “Gold prices are volatile, quickly reversing trends up and down. But recently, it has been moving up more than down, said Rafik Abassi, head of gold committee at the Egyptian Federation of Industries.

On Monday, gold climbed to $881.75 an ounce on safe-haven buying after Israel launched a ground offensive in the Gaza Strip, while gains in oil boosted investor appetite for the precious metal.

However, it fell on Wednesday as a stronger dollar versus the euro and gains in share prices reduced bullion s allure as an alternative asset.

On Thursday, gold firmed above $840 per ounce – recovering from a two-week low of $833 – as continued worries about conflict in the Middle East, a climb in oil prices, and financial market instability helped spur buying. The figure compares to $720 an ounce a month ago after a heavy plunge in oil dragged gold prices down.

By press time on Thursday, oil traded higher, reaching $43 a barrel after diving 12 percent overnight, partly due to higher than expected US crude stocks data that hardened evidence of weakening demand.

“Gold prices vary depending on oil prices as well as supply and demand factors. People are now rushing to buy into gold, so demand has intensified, pushing prices up, Abassi explained. “Gold prices are also correlated to oil, but demand is a strong mover of prices nowadays rather than oil.

Ahmed El Sirgany, an Egyptian jeweler, confirmed that demand on gold has been picking up. “People began to feel that gold prices will underpin again, so demand increased on gold coins and bullion as a source of investment. People are turning their money into gold.

The ongoing global market turmoil has improved prospects for the yellow metal, given it is seen as a safe haven in a time of rising inflation, a weak US dollar, and economic uncertainty. Abassi pointed out gold prices leapt to $1,000 an ounce six months ago -just shy of a record high of $1,600 -as the global economic crisis intensified.

Several analysts say that low visibility on prospects for the global economy could mean more money is poured into gold as a safe haven.

“In times of uncertainty and volatility in currency, gold has always been a safe haven, said Angus Blair, head of research at Beltone Financial.

HSBC raised on Thursday its 2009 and 2010 gold price forecasts on expectations the faltering global economy will prompt investors to buy into the yellow metal as a haven from risk.

The bank increased its 2009 gold forecast to $825 an ounce from $800, and its 2010 price view to $775 from $725, but left its long-term forecast at $700.

We believe gold will attract safe-haven buying from risk-averse investors this year, as economic uncertainties are likely to persist for the foreseeable future, HSBC analyst James Steel said in a research note.

Demand for gold coins and bars is likely to remain strong in 2009, he added.

While gold fever is sweeping among investors, demand on fine jewelry is slipping. “Demand on gold as an investment is flourishing above average . but demand on fine jewelry is very slow. It’s half what it used to be, El Sirgany said.

At times of high inflation and economic slowdown, he explained, demand for luxury gold strongly topples. “Luxury gold is the first commodity people erase from their [buying] plans.

While demand is tumbling, luxury gold prices are still stable on the domestic market. “Prices in Egypt are connected with global prices. And prices worldwide are still high, so [we] can’t lower prices in Egypt. They first have to decline globally, he added.

Topics: FJP

Advertising Area

Advertising Area



https://www.dailynewsegypt.com/2009/01/08/forecasts-say-gold-prices-will-continue-to-rise/
Breaking News

No current breaking news

Daily News Egypt Android App Available for free download on Google play
View
Daily News Egypt Ios App Available for free download on APP Store
View