The value of gold might reach $1,600 per troy ounce this year as a result of interest rates staying low and Europe's continued struggle with its debt-riddled banks, according to an English researcher's report.
Demand for gold might grow so that the precious commodity draws "major expansion in investment before the gold bubble inevitably bursts," Bloomberg reports GFMS of London stated. Investment in gold will be 15 percent higher during 2011's first half than it was during 2010's same period.
"We are looking at more of the price strength to occur later into the year," research head Neil Meader told Bloomberg.
GFMS stated demand for gold is rising. In 2010, when the value of gold surged 30 percent, gold jewelry demand climbed 16 percent. Gold bar hoarding more than doubled.
"For prices to stay firm, the market is clearly dependent on investment," according to GFMS. "Investors and some official sector institutions will be very concerned at the growing risks of currency debasement, be that via inflation or depreciation, and of sovereign debt default."
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
