Gold at $1,600? Don't bet against it, says Scotia

Gold at $1,600? Don't bet against it, says Scotia
Gold may advance to a record $1,600 an ounce this year as investors seek to protect their wealth from Europe's sovereign-debt crisis, boosting demand, according to Scotia Capital.
AUG 11, 2011
By  Bloomberg
Gold may advance to a record $1,600 an ounce this year as investors seek to protect their wealth from Europe's sovereign-debt crisis, boosting demand, according to Scotia Capital. “The investment community found it's a great investment metal,” Sunil Kashyap, regional head of Asia-Pacific, global capital markets, said in an interview in Bangkok on May 24. Platinum also has “room to grow,” and may outperform other metals when there's an industrial recovery, said Kashyap. Immediate-delivery gold, which touched a record $1,577.57 an ounce earlier this month, is set for an 11th year of gains with interest fuelled by Europe's debt crisis and quickening inflation. Global gold demand rose 11 percent to 981.3 metric tons in the first quarter, the World Gold Council said May 19. People realized that both gold and silver have dual functions, not only as industrial metals but also as financial assets that preserve their value, said Kashyap. Immediate-delivery gold traded at $1,521.95 an ounce at 2:23 p.m. in Singapore, 7.1 percent higher this year. Spot silver, which reached an all-time high of $49.79 an ounce on April 25, traded at $36.32, 17 percent higher this year. Platinum was at $1,764.65 an ounce, little changed in 2011. Europe's sovereign-debt crisis has driven the euro to a record low against the Swiss franc and boosted precious-metals demand among investors. Portugal, Greece and Ireland have received bailouts. Assets held in gold-backed exchange-traded funds rose for a third day to 2,052.987 tons yesterday. Gold may break through $1,600 an ounce in the next six months, Mark Cutifani, chief executive officer of AngloGold Ashanti Ltd., the world's third-largest producer, said on May 11. Euro Pacific Capital Inc.'s Michael Pento, who correctly predicted gold's highs for the past two years, last month forecast a 2011 high of $1,600 an ounce.

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