LONDON, Jan 15, 2008 (AFP) – The price of gold is hitting new record highs owing to the troubled US economy and a cocktail of other supportive factors, leading some analysts to predict 1,000 dollars per ounce could happen soon. In recent days the precious metal has blasted past 900 dollars in a record-breaking run.
Unprecedented demand for jewellery production in China and India, the weak US dollar, rising inflation due to high oil prices and fraught geopolitical concerns have sparked demand for precious metals — particularly gold.
On the London Bullion Market on Monday, gold blazed a trail as high as 914.30 dollars per ounce. On Friday, gold had broken through 900 dollars for the first time during New York trade.
“Psychologically, 1,000 dollars per ounce now has to be a target,” said John Payne, portfolio manager of Hexam Global Resources Absolute Return Fund.
“Gold looks very well supported.
“I think the primary driver is concern over the US economy and the weak dollar. Food price inflation, geopolitical concerns and oil near 100 dollars per barrel are all drivers of the price,” added Payne.
The weak US currency makes commodities priced in dollars — like gold and crude oil — cheaper for buyer