Will Silver Beat Gold in the New Year?
By Commodity Online
03 Jan 2008 at 10:01 AM GMT-05:00
resourceinvestor.com
MUMBAI (CommodityOnline.com) -- Will silver beat gold in the new year? If the hints from commodity specialists are any indication, silver is set to outshine gold this year with an increase of nearly 27%, while the yellow metal may witness a 17% rise.
According to analysts, average gold price will be around $814 an ounce in 2008, while silver is more likely to average $17 an ounce.
Gold was up in Asian trade by $5 at $838.70 an ounce on Wednesday, and silver was up six cents at $14.85 an ounce. According to experts, last year gold averaged $695.39, while silver was at $13.38.
Another worry for those who invest in gold is the dollar fall against several currencies, including the rupee.
According to analysts, this year investors should be cautious on the yellow metal. The market sentiment is truly mixed and 2008 would be a tug of war between gold bulls and bears.
The gold market has three stages spanning over 12 years, with price largely determined by currency devaluation in the first four years.
The next four years will be dominated by global investment demand, and the final stage is the speculative mania.
Gold Hits High Despite Global Concerns
The precious yellow metal struck an all-time high as it crossed the $866 mark on the London Bullion Market Thursday.
Global worries such as rising oil prices, tensions in Pakistan and Iraq and a struggling dollar cannot prevent the gold from achieving this record feat.
The price of gold reached an historic $866.53 an ounce on the London Bullion Market. It later slipped back slightly to stand at $865.76.
Gold prices, which are also winning support from increased jewellery purchases in emerging economic powerhouses China and India, first smashed its 28-year-old record of $850 an ounce on Wednesday.
According to analysts, current price movements were being slightly exaggerated by the lightness of holiday trade, which meant large transactions could influence the market more than usual.
Political unrest in Pakistan following last week's assassination of opposition leader Benazir Bhutto has led to fresh interest in gold because the precious metal is regarded as a haven in troubled times.
Higher oil prices also encourage the buying of gold, which is seen as a hedge against inflation, which is being driven in many countries by the surging cost of crude.
Benchmark oil prices hit $100 in New York on Wednesday for the first time, owing to tight supplies and continued strong demand.
Gold prices, which last year rose 30%, were also getting a boost from the weakness of the United States currency, which encourages demand for dollar-priced commodities because it makes them cheaper for buyers using stronger currencies.
Read Resource Investor's coverage of gold's record-breaking day here.
By arrangement with www.commodityonline.com. |
