|
Deutsche bank claims gold to reach highest level since 1981 { January 17 2005 } Original Source Link: (May no longer be active)
http://www.busrep.co.za/index.php?fSectionId=&fArticleId=2375431http://www.busrep.co.za/index.php?fSectionId=&fArticleId=2375431
Gold price to reach the highest level since 1981
January 17, 2005
By Stuart Wallace
London - Gold prices will reach their highest level since 1981 this year as a weakening dollar boosts demand for the metal as a store of value, Deutsche Bank has said.
The bank has also increased its estimates for aluminium, coal and iron ore prices.
Gold in 2005 would average $458.80 an ounce, 7 percent more than a previous estimate, Deutsche Bank said in a report dated January 13.
The average next year would jump to $490.30, the highest since 1980, according to Europe's third-largest lender.
Gold closed down $4.10 at $422.50 an ounce in London on Friday. The metal's average price rose 13 percent last year to almost $410 an ounce, the third annual gain, as the dollar fell against all major currencies.
"Further weakness in the US dollar as a result of unsustainable external imbalances and only measured return to a positive real interest rate environment in the US is expected to be particularly beneficial to dollar gold prices," said London analysts John MacKinnon and Tama Willis.
The forecast for this year's gold price was higher than the $435 median from 37 analysts surveyed by Bloomberg last month.
Estimates ranged from $395 to $550. Frankfurt-based Deutsche Bank had the seventh-best mining analysts in 2003, with UBS, ABN Amro Bank and Merrill Lynch the top three, according to the Thomson Extel survey.
London-based precious metals research group GFMS said on Friday that gold prices would probably rise to a 16-year high by July and average $447 an ounce in the first half.
Gold climbed to $454.20 in December, the highest price since June 1988. The average price was $614.49 in 1980.
"The kind of buying you can see from speculators and funds could take the gold price above $500," said Gillian Moncur, an analyst at London-based consultant CRU International. "The dollar remains the dominant factor."
The euro touched a record high of $1.3666 on December 30. The dollar's value has eroded as US trade and fiscal deficits have widened.
The US trade gap unexpectedly grew to a record $60.3 billion in November. The federal budget deficit was a record $412.3 billion in 2004.
The dollar in 2005 might end a three-year decline against the euro as the Federal Reserve adds to its five interest rate increases June, a Bloomberg survey notes.
Deutsche Bank also raised estimates for aluminium and coking coal prices for this year and next because of expectations that global industrial production will be above average.
The aluminium estimate for 2005 was raised 6 percent to $1.92/kg, and for next year by 10 percent to $1.87/kg.
The bank increased its coking coal estimates by 39 percent, to $125 a ton this year and $118.80 a ton in 2006. Iron ore estimates for this year and next were raised by 7 percent, Deutsche Bank said.
"An extended period of strong growth in China, renewed strength in the US economic outlook in 2005 and a rebound in Japanese and euro zone growth in 2006 are set to deliver another two years of above-trend global industrial production growth," the bank said.
|
|
