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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (72342)	12/12/2010 7:38:43 PM
From: LoneClone	Read Replies (1) \| Respond to of 194002

More cautious look at the gold price from Australia's RCR Australian research group RCR reckons the gold price may continue to rise averaging $1450 in H1 2011, but then may start to decline as safe haven appeal falls away. Author: Lawrence Williams Posted: Sunday , 12 Dec 2010 LONDON - mineweb.com In its latest quarterly analysis of gold and gold stocks, Australian research house Resource Capital Research (RCR) takes a more cautious view on the likely progress of the gold price than many other analysts. RCR believes that gold may have a little further to move upwards, but for a relatively limited time, with a prediction that it may start to turn down towards the end of 2011 as economic growth continues to pick up in the major older economies and its safe haven appeal diminishes. RCR does point out though that since the start of 2008 (pre-the global meltdown), gold has stood head and shoulders above most other major asset classes, appreciating by 67% while equity markets, are still in negative territory. Copper has challenged (up 35%) but silver has performed even better - up by 96% since January 2008 - although it suffered a horrendous time immediately post the October 2008 crash. In the past three months overall, the gold price is up 11%, and in the last twelve months, it is up by 24%. RCR argues that predicting the future price is no longer about analysing gold's fundamentals, but more about analysing market psychology, the almost total lack of trust in most asset classes, and the predominance of a ‘crisis mentality'. At the moment it seems that gold (and other precious metals),reckons RCR, as safe havens, are virtually the only investment vehicles that can be trusted. But, looking slightly longer term, should other asset classes start to regain the market's trust, the need for a safe haven is reduced. In this scenario gold's fundamentals look precarious. That will happen in time, and RCR believes that gold will eventually come off and re-test US$1,000/ounce. However, it is hard to bet on this happening in the short-medium term, particularly with the US dollar under renewed pressure and European sovereign debt fears threatening the banking sector contagion. Thus the group's expectation for the first half of 2011 is for gold to average US$1,450/ounce obviously setting new records in the process. Eventually though, RCR feels that gold's unique safe haven appeal will start to dissipate - which it admits is a guess (and only a guess!) in the second half of 2011, if there is a sustained recovery in equities. Gold Stocks RCR notes that the Australian gold shares it takes into account have out-performed strongly over the past six months, due to corporate activity, exploration success, and relief flowing from the restructuring of the proposed ‘super profits' tax. This is despite the A$ gold price actually falling by 6% in this period. But on the other hand South African gold stocks have consistently underperformed - returns in physical gold have been superior to holding South African shares, while holding Canadian gold shares has produced returns similar to that of physical gold. For further information go to www.rcresearch.com.au