Macro, Supply/Demand Forecasts Mix could Send Gold Soaring to $1,000/oz

Source: Mineweb.com  (10/9/07)

Noting that 2007 is running $62/oz above the 2006 average of $605/oz, analysts John H. Hill and Graham Wark declared that "we would not be surprised to break its historical highs of $850/oz."

Citigroup metals analysts said Monday they are positive on gold "based on a mix of macro and supply/demand forecasts," that could send gold beyond its historic ceiling of $850/oz to as much as $1,000/oz or higher under certain circumstances.

Noting that 2007 is running $62/oz above the 2006 average of $605/oz, analysts John H. Hill and Graham Wark declared that "we would not be surprised to break its historical highs of $850/oz."

The analysts theorized that the policy resolution to the current credit crunch may be "an extended ‘Re-flationary Rescue,' in a new cycle of credit creation and competitive currency devaluations that should be inherently positive for pro-cyclical basic materials, hard assets, oil and gold."

"This could take gold to $1,000/oz or higher," they predicted.

Citigroup hiked gold forecasts for 2009/2010 to $800/$820/oz and long-term valuation to $700/oz. "Within this, a test of $850-$1000/oz is likely," they advised.

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