Buoyant economic growth in India and China have contributed to the robust global gold prices, which are further set to rise in the first half of 2007, leading precious metal consultancy firm GFMS says.
“We should be seeing prices reaching around 670 dollars or so in the first half, although it is less certain we will see the recent high of 725 dollars surpassed,” GFMS Chief Executive Officer Paul Walker said at a seminar in Toronto, Canada.
Towards the end of the current year or in 2008, the prices could cross 725 dollars especially if the situation in the Middle East worsens driving oil prices higher, he added.
He said the recent gold market rally above 600 dollar level was contributed by physical buyers who helped the resilience, despite dollar rate strengthening to 1.29 against Euro.
The consultancy also attributed the robustness to factors such as “the buoyancy of economic growth in countries like India and China.” GFMS projects gold prices to track higher over the coming months, primarily driven by the weakness in dollar, slowdown in the US economy and disappointing returns from equity assets.
GFMS believes that investments would be the prime driver of such rally.
“We are fully expecting investors buying to come back in force, mainly in response to actual and potential dollar weakness. A slowdown in the US economy and disappointing returns in conventional assets such as equities should also lift gold,” Walker said.
Gold prices closed at 624.80 dollars per ounce in New York yesterday.