This probably had more to do with today's pog than the measly rally in the U.S. $.......................
1/12/99 - Gold unlikely to regain price glitter in short term
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JOHANNESBURG, Jan 12 (AFP) - Gold is unlikely to retain its former glitter in terms of price over the next year, according to commodity research company Gold Fields Mineral Services (GFMS) in a report released Tuesday.
The assessment follows a disappointing 1998 in which the precious metal traded at an average of 294 dollars an ounce, its lowest level for 20 years.
"That gold performed so poorly was ascribed to the fact it was increasingly behaving like any other commodity, and that its role as a hedge against inflation and uncertainty was diminishing," the GFMS report said of gold"s 1998 performance.
The London-based GFMS said gold was expected to remain in a 270-310 dollars an ounce band in the first half of 1999.
"We can envisage circumstances which could see gold break above 310 dollars, although we do not think them particularly probable," GFMS managing director Philip Klapwijk said.
"For instance, a serious threat to global stability, possibly triggered by a collapse in world stock markets -- arguably they have far more downside potential than upside -- combined with a large fall in the dollar, could stimulate buying interest from individual investors as well as from the funds.
"We believe that unless there is an important shift in producer attitudes to the price, hedging will act to constrain any sustained break-out above 310 dollars."
GFMS said there was a possibility of further devaluations in major consuming countries like India and China, causing a sharp fall in demand and potential for net supply from scrap. |
