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Gold forecasted to break above 1.500 USD in 2011 after 29% rise in 2010

Thursday, January 6th 2011 - 11:56 UTC
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Concerns over the US dollar and world economy have skyrocketed gold Concerns over the US dollar and world economy have skyrocketed gold

Gold closed 2010 with its strongest annual performance since 2007 and marking a fifth straight month of gains in December, driven by a weaker dollar and global economic uncertainty.

Spot gold rose to 1,418.86 US dollars an ounce on course for a 29% annual gain and a fifth straight month of gains, the longest stretch of monthly increases since late 2001.

Meantime the US dollar fell 0.4% against a basket of currencies, having fallen by 12% against the Yen and by more than 9% versus the Swiss franc this year.

“The gold price remains well supported by a weaker dollar and solid investment demand,” said Anne-Laure Tremblay, precious metals strategist at BNP Paribas.

”We expect the gold price rally to continue into 2011 on the back of strong fundamentals, including inflationary pressures (notably in China), ample liquidity and concerns about the value of the dollar,” she added.

Traders and analysts expect gold to break above 1,500 in 2011, particularly if the dollar extends its decline, the U.S. economy remains unable to generate enough jobs to lower unemployment and Europe's debt crisis is not diffused.

Meantime spot palladium rose 1.7% to 799.70 USD an ounce, after rising to a nine-year high of 795.47 on Thursday. Spot silver was the second-best performer in precious metals, up 82% on the year. It was trading up at 30.945 USD after having reached 30.88 on Thursday.

Silver futures reached a record 50.35 in 1980, a year after the Hunt brothers tried to corner the market. Platinum futures for April delivery rose 20.20 or 1.2% to 1,769.50 USD an ounce. Before Friday, the metal gained 19% this year.

Categories: Economy, International.
Tags: gold, US dollar.

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  • Redhoyt


    Jan 06th, 2011 - 01:37 pm 0
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