Barclays Capital analysts see gold price reaching $1,000 again this year
Commodity prices seen to stay weak for remainder of year, but gold a
positive pick as a relatively safe asset.
LONDON (REUTERS)
Reporting by Michael Taylor, Editing by Michael Roddy
10 October 2008
Gold prices could exceed $1,000 an ounce within the next few months as
investors exit other commodities on heightened fears over a global economic
downturn, said Barclays Capital.
Barclays' metal analysts, speaking at a press briefing on Thursday, said the
current market turmoil is likely to lead to short-covering in base metals
while long-term investors head for gold which is perceived a relatively safe
asset.
"In current volatility, I certainly wouldn't rule out $1000 with investors
turning more positive toward gold," said Suki Cooper, a commodity analyst at
Barclays Capital.
Earlier on Thursday, spot gold hit an intra-day high of $908.90 an ounce --
near a 1-week high of $920 touched on Wednesday well below a record high of
$1,030.80 hit in March as the dollar fell and financial worries deepened.
With the credit crisis sending global markets around the world into a
downward spin in recent months, Barclays analysts said demand for base
metals worldwide is likely to worsen.
"Huge uncertainty in the global economy and sharp downward revision to
growth expectations suggest a period of very weak metals prices for the rest
of this year and into early 2009," said Barclays analyst Kevin Norrish.
Norrish added that in the base metals complex, prices for lead, nickel and
zinc could fall further and trade below their marginal cost of production
with a potential longer period of attrition.
Copper and tin were seen as long-term winners, as the two markets are dogged
by tight-supplies.
Barclays' forecasts for 2009 are copper at $6,500 a tonne, tin at $17,000
and aluminum at $2,600.
Copper for three-months delivery on the London Metal Exchange was at $5,335
a tonne by 1622 GMT, while tin was at $14,700 and aluminum at $2,300.
Ahead of LME Week, Norrish said the fall in metal prices and bearish outlook
"how bad will things get" is set to be a main focus.
But Norrish was optimistic due to the majority of demand for metals now
coming from developing rather than industrialized economies as was the case
in previous slowdowns.
"Thing's won't be quite as bad as in previous downturns," he said, although
a difficult 3-6 months awaited metal investors.
From www.mineweb.co.za