850 dollars soon

Gold set to reach $US850/oz soon

Rebecca Lawson
Wednesday, January 02, 2008

ANALYSTS believe the price of gold could push past its record high of $US850 per ounce early this year, spurred along by the recent assassination of Pakistan opposition leader Benazir Bhutto.



The precious metal's safe haven status continues to curry favour with investors as the volatility of 2007 looks set to persist in 2008, with February delivery of gold reaching a near 28-year high of $842.70/oz in New York yesterday before closing at $838/oz.

Gold has had a spectacular run in 2007, climbing more than 30% over the year on the back of a sliding US dollar, record high oil prices, credit concerns and a falling US interest rate.

"For gold, this marks the sixth consecutive year of positive returns and, consequently, represents the longest gold-price rally in history," Deutsche Bank told Reuters.

The recent murder of Bhutto and the prospect of further widespread unrest in the Middle East look set to push the gold price even higher with most analysts believing it will reach its 1980 high early this year.

News of Bhutto's assassination in Pakistan sparked a rally in gold late last week, with its closing price climbing 1.3% to $842.70/oz.

"It's not a matter of if it will go to $850, but when,'' TheBullionDesk.com analyst James Moore told Bloomberg.

Despite the positive outlook for the precious metal, gold stocks on the Australian bourse were mixed at time of writing with Newcrest Mining up 1.7% to $33.66, Lihir Gold was unchanged at $3.61, Sino Gold was down 2.7% to $6.76 and Centamin Egypt was down 0.4% to $1.40.

The spot price of gold last traded at $833.40/oz.


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