Market analysts wonder if the psychological threshold of $1,007.70 per ounce of gold reached on September 8 at the London Exchange, which was the highest score after the record level in March 2008, will serve as a prologue to further growth in price for the yellow metal called the last shelter asset.
Opinions in this respect vary. Some experts explain the growing gold price quotations by the U.S. dollar rate, lowest since December 2008, making the U.S. currency less attractive as an investment asset and thus impelling investors to look for alternatives.
Other analysts say that gold avails itself of the fear of inflation caused by the massive monetary injections of various governments.
And finally, September is the month when the season of marriages starts in India which traditionally goes hand in hand with an increase in demand for gold jewelry.
Do these factors anticipate an increase in the price of gold in the long term? Fuchs Natural Resources Fund, an international investment company, believes that the price of gold will evolve to $ 1,250 per ounce in the short term, while in the long term it may reach $ 2,000 and explains this trend by a low supply and strong demand.
Barrick Gold, a Canadian gold miner, agrees that gold has an ever brighter future. According to the company’s experts, the economic policy pursued by the world’s leading nations is fraught with risks of higher inflation and negative impact on the value of world currencies which will inevitably bring about higher gold quotations.
The French-Belgian Dexia Group has exactly the opposite opinion and believes that the $1,000 threshold looks more like a marginal point than a departure line for a next level increase. Therefore the company advises investors to abandon their gold operations and fix their earnings disposing of their gold investments, at least partially.
"Investing in gold is pure speculation. Today, the fear of a resurgence of inflation is not based. Various governments will not allow this because the economy would be destroyed," Dexia says.
Julian Jessop, a well-known British economist, also says that gold is losing its status of safe haven asset. According to this analyst, any further decrease in dollar rate may be accompanied by growing prices for gold, "but its role as a safe haven is coming to an end."
Mark Haаеrris, an expert at Henderson New Star, does not agree with Jessop. Although he does not expect that prices for gold will drop in the nearest years he calls it an effective shield against inflation.
Alex Shishlo, Editor of the Rough&Polished European Bureau in Brussels
