Everybody’s favorite metal, gold, continues to seek new levels, with the price soaring this past week to the $440-$450(US) per oz range.
With a weakened American dollar and the announcement of a higher U.S. trade deficit in February, bond and stock prices in the United States are taking a pounding. Gold, on the other hand, is looking better every day.
How high will the precious metal trade? Joe Ismial, technical analyst with Walwyn Stodgell Cochran Murray of Toronto, sees a lot more room for improvement.
“I made a forecast last August of $550 in 12 months’ time and I’m going to stick with it,” he told The Northern Miner.
Mr Ismial thinks the present rise in gold prices is tied more to the metal’s value as a currency than for its industrial uses and foresees a slight hike in the inflation rate which should strengthen the demand for gold.
Along with gold, the prices for platinum and silver are heading upwards, with the spot price for platinum this past week reaching the $600 mark and silver approaching the $6.90 level.
On the Toronto Stock Exchange, recent trading has seen the composite index move downwards and the golds index edge ever higher. The gold and silver index on the tse is fast approaching the 10,000 mark.
Making investors nervous, analysts say, is the fear of higher interest rates, which will boost credit rates and in turn put a damper on economic growth.
The U.S. dollar in Tokyo this past week fell to its lowest closing level since modern exchange rates were set approximately 40 years ago.
Often-mentioned reasons for the rise in gold prices are the troubles in South Africa, where corporations which have withdrawn their business interests are looking for other opportunities in which to invest their money, and the Brazilian debt crisis, where that country has threatened to suspend its interest payments to outside lenders.
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