GFMS Gold Survey Calls For New High
Posted on Apr 16th, 2007 with stocks: GDX, GLD, IAU
Hard Assets Investor submits: GFMS took the wraps off its much anticipated Gold Survey 2007 report (.pdf), unveiling a bullish call for gold to move above its 2006 high of $725/ounce by the end of this year.
“Quite whether we’d then get close to the all time high of $850 is more doubtful, but I’d certainly expect the upward price trend to continue on into 2008,” said Philip Klapwijk, chairman of the independent precious metals research consultancy.
GFMS’s bullish assessment is based mainly on rising investment demand, although demand actually slipped from 2005 to 2006 as prices stopped their meteoric ascent. Still, the GFMS is bullish. “The strength of the gold price in 2007 to date, the continued moving up of the floor at which physical buying kicks in to support the metal and a further, albeit smaller, decline in gold supply is also expected to boost investor confidence in the yellow metal,” it said.
The group expects central banks governed by the Central Bank Gold Agreement to limit their sales in 2007, removing one other obstacle to higher prices. The wildcard in all this, which is not mentioned in the GFMS press release, is the International Monetary Fund, which is considering significant gold sales. If the IMF pulls the trigger, any upside for gold could be capped. The GFMS report is widely followed by gold traders, and could help set the tone for the gold markets in the coming months.
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