Over the past nine years, gold has managed to post successive increases in its annual average price, navigating the choppiest of waters.

In the first six months of this year, against the backdrop of very volatile global equities markets, gold bullion has gained over 13 per cent to finish at US$1,242 per ounce at the end of last month on the back of continued investor concerns over the Greek debt crisis and the prospect of contagion.

With gold hitting all-time highs in several currencies in recent weeks including the euro, we thought it would be worthwhile to remind investors of the fundamental factors which may drive the gold price in coming months and years.

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Gold has been on the minds of investors ever since the world’s financial system went south in 2007 with its safe haven status looking like a godsend.

The seemingly never-ending series of share market corrections and other shocks - the European debt meltdown being just the latest - has only served to enhance the precious metal’s appeal.

Last Friday, gold rallied to an all-time high above US$1,262 an ounce thanks to the weak US dollar and disappointing American economic data.

That’s a long way from US$905.10 an ounce recorded last July, when it was at its lowest in 12 months. Even while it hovers at record levels, some believe its outlook remains promising.

Commodities investor Jim Rogers says that gold will go well over US$2,000 in the next decade while the chief investment strategist at UBS Wealth Management Singapore, Mr Kelvin Tay, targets a price of US$1,500 an ounce for the next 12 months.

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THE price of gold has charged to a new high of nearly US$1,055 (S$1,466) an ounce amid speculation that it could hit US$2,000 in the next decade.

Local investors are joining a global gold rush by pouring cash into the precious metal owing to inflation fears and concern that major currencies such as the US dollar will keep falling in value.

They worry that spending sprees by the United States and other governments to tackle the global recession will undermine currency values and fuel inflation. Gold is regarded as a safe-haven investment, and a hedge against inflation or rising prices.

Mr Wong Weiyi, a research analyst at unit trust distributor Fundsupermart, said gold typically rises in price when the US dollar is falling and vice versa.

The price of gold has soared 19 per cent since the start of this year. At 5pm yesterday, it was 1.1 per cent higher than Wednesday’s close of US$1,044.20. Yesterday was the third straight day it hit a record high.

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LONDON: Gold rose to a record high on speculation that inflation will accelerate and erode the value of the US dollar, boosting the appeal of the precious metal for investors seeking to preserve their wealth.

Gold was also boosted by a sharp drop in the greenback on a report, later denied, that Gulf Arab states were considering abandoning it for oil trading. Gold futures climbed as high as US$1,038.95 (S$1,453.40) an ounce in New York, topping the previous record of US$1,033.90 in March 2008.

The spot price headed for a ninth straight annual gain, the longest rally since at least 1948. The US dollar fell as much as 0.6 per cent against a basket of six major currencies.

‘Gold is acting like the ultimate currency,’ said Mr Chip Hanlon, president of Delta Global Advisors in Huntington Beach, California. ‘Everyone’s concerned about the dollar, but it’s not like you can hate the dollar and fall in love with the euro or the yen.’

The reason is that central banks are following the same monetary course and trying to stimulate and inflate their way back to growth.

‘Even without the weak US dollar, gold is performing quite well,’ said senior Commerzbank trader Michael Kempinski.

Gold yesterday hit six-month highs when priced in sterling and euros, breaking above \244700 (S$1,445.20) an ounce for the first time since early April.

Mr Peter Fertig, a consultant at Quantitative Commodity Research, said the final quarter was typically strong for gold, due to rising jewellery demand and as the US dollar is seasonally soft.

BLOOMBERG, REUTERS

Source: Straits Times (subscribers only)

Dear readers,

I’m selling off a portion of my bullion assets to finance another asset investment that I’m taking up soon.

The following bullion are up for grabs:

1) 100 x 1oz bullion Silver American Eagles (in tubes of 20s) (SOLD)
2) 10 x 1oz bullion Pan American Silver Bars (SOLD)
3) 1 x 1oz Perth Mint bullion gold bar (sealed) (SOLD)
4) 1 x 1oz bullion Singapore Lion gold coin (SOLD)
5) 1 x 1oz bullion Canadian Maple Leaf gold coin (SOLD)
6) 2 x 1oz bullion Australian Kangaroo gold nugget coin (SOLD)

For gold bullion, looking at the average of the buy & sell price in the UOB website.
For silver bullion, looking at S$33 per oz but S$32 per oz if buyer takes all 110oz.

If you are looking at increase your gold and silver investment, now is the time that you’ve been waiting for!

Please email me at chris@bulliongold.net to make your offer.

Hi everyone,

It’s that time of the year where friends and family gather together and have a glorious spread of turkey and ham. It’s also a spirit of giving and sharing. Remember to make some donations while on your way to the party!

Consider rewarding your loved ones with a shiny gold or silver bullion coin as a Christmas present.

How are you celebrating this Christmas?

I’m going to be have a potluck party at one of my classmate’s place. There’s going to be lots of food and drinks to go around while we party our way through the night.

Here’s wishing everyone a Merry Christmas and lots of joy in the year to come.