Investec: Rising gold price self-fulfilling
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Johannesburg - A rising gold price is self-fulfilling as central banks become less inclined to sell as they hold out for a higher price, Jeremy Gardiner, director at Investec Asset Management, said on Thursday.
Looking at trends in the bullion price, which has become extremely volatile, Gardiner pointed out that the price on June 1, 2002 had been exactly where it had been on June 1, 1982.
"The gold price is certainly not at an all-time high," he said.
A significant contribution to recent strength included an over-priced dollar, fuelling concerns of a significant fall in the world's leading currency.
"During the late nineties, America attracted more than their fair share of global capital flows as a result of their rampant economy and stock market bull market.
"However, times have changed, and with the outlook for US equity markets boring at best, capital is leaving the US at approximately US$1 billion per day." |
