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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Tunica Albuginea who wrote (42457)	10/8/1999 11:24:00 AM
From: Alex	Respond to of 116764

10/08/99 - Two South African economists see surge in gold price <Picture> Oct. 8-MAR-- [B] Two South African economists see surge in gold price By Sue Thomas, I-Net bridge Johannesburg--Oct 8--The gold price rise is no flash in the pan and could surge ahead this year and next year, 2 South African economists have predicted. * * * The Bank of England threw the trend and sent the gold price plummeting when it announced it would sell its gold reserves to finance debt relief for poorer countries. It was put back on track when 15 European central banks, including the Bank of England, announced a surprise five-year moratorium on all new sales of gold held in official reserves. Gold rose to a high of US $338 per ounce. "Is it a flash in the pan? No, not in the immediate future. As long as commodities rise, gold will rise and we could see it up to $400 next year," Jos Gerson, an economist with Merrill Lynch, told a seminar on the economic outlook in Johannesburg today. He said gold has always moved with, and sometimes led, commodities. "Commodities are doing well because the world is waking up. Asia and Europe are running again and the US is showing no sign of cooling. The world is suddenly firing on all four pistons." He believes the precious metal will maintain an average of $335 over the next 12 months, which will add 0.5% to GDP growth. Daryll Owen, general manager of investments at BoE Private Bank, also believes gold will hit $400 and remain high until the middle of next year. Gerson says it"s going to be a good Christmas for South Africans, as the economy and the markets look set for an upswing into next year. Consumer spending is up and the rand will remain relatively strong against the dollar. From narrowly avoiding a recession this year, he forecast that the country will achieve 3% growth next year. Gerson predicted, however, that the Dow Jones industrial average will crack next year. "This is the major problem we face next year. What we have is one of the most classic bubbles of the century," he said, although he believes there isn"t the remotest chance of a 1930s type crisis. Central banks have the ability to react to a crunch in ways that they did not before. He says it"s difficult to predict the timing of a bubble bursting, but believes it may happen before the middle of next year. "When the Dow goes, all markets will correct," he says. "We must expect a roller coaster ride, but ride the curve for the time being." End (6.04 rand--US $1) I-Net Bridge, Tel: +27-11-280-0644 Send comments to Internet address: emerg@bridge.com The Bridge ID for this story is ZXHWWV