Gold may advance to $1,500 by end of year
Tuesday, 22 June 2010
SINGAPORE, June 21 (Bloomberg): Gold will climb to a record $1,300 an ounce in the coming weeks as investors sell the dollar, and may advance to $1,500 by the end of 2010, according to a technical analysis by Credit Suisse Group AG.
Bullion may jump to $1,500 an ounce, 19 per cent more than the record $1,262.50 set on June 18, before investors see gold as a "bubble," said Michael Macdonald, technical analyst with Credit Suisse, citing momentum indicators.
The metal's 14-day relative strength index, which compares gains and losses on a weekly basis, advanced to a one-month high of 68.195 on June 18. A level of more than 70 is seen by some investors as a signal that prices are about to drop.
"The trend is quite dominant and well-defined, as the momentum is strong and the RSI is trending higher," Singapore- based Macdonald said in an interview. "If it hits $1,500 by the end of the year, it will create a bubble scenario and that could be a bit panicky."
Gold has gained 15 per cent this year and is set for a 10th annual advance, the longest run of gains since 1920, as investors seek to safeguard their wealth against the sovereign- debt crisis in Greece and other European countries.
The metal traded at $1,258.35 an ounce at 9:09 am in Singapore. The dollar slumped 2.3 per cent last week against six major currencies, the most since May 2009.
Bullion may jump to $1,500 an ounce, 19 per cent more than the record $1,262.50 set on June 18, before investors see gold as a "bubble," said Michael Macdonald, technical analyst with Credit Suisse, citing momentum indicators.
The metal's 14-day relative strength index, which compares gains and losses on a weekly basis, advanced to a one-month high of 68.195 on June 18. A level of more than 70 is seen by some investors as a signal that prices are about to drop.
"The trend is quite dominant and well-defined, as the momentum is strong and the RSI is trending higher," Singapore- based Macdonald said in an interview. "If it hits $1,500 by the end of the year, it will create a bubble scenario and that could be a bit panicky."
Gold has gained 15 per cent this year and is set for a 10th annual advance, the longest run of gains since 1920, as investors seek to safeguard their wealth against the sovereign- debt crisis in Greece and other European countries.
The metal traded at $1,258.35 an ounce at 9:09 am in Singapore. The dollar slumped 2.3 per cent last week against six major currencies, the most since May 2009.