‘Gold may easily rise to $1,000’

Font Size

Print

Feedback

Email

Discuss

Save & Share Article

What’s this?

Digg	My Yahoo	Fark
del.icio.us	Newsvine	Reddit

Rate This Article

New York, Nov 16 Gold may ‘’easily’’ rise to a record $1,000 an ounce next year as the dollar weakens and Asian central banks diversify their reserves, said Marc Faber, who advised investors to acquire the metal at the start of a six-year rally.

A ‘’continued’’ weakening of the US currency may help gold to climb above its all-time high of $850 traded in January 1980, said Faber, managing director of Marc Faber Ltd. and publisher of the Gloom, Boom & Doom Report.

‘’That’s baked in the cake in my opinion,’’ he said in an interview. ‘’Gold is still relatively cheap. It hasn’t risen as much as nickel, or oil.’’

The metal has climbed 18% in more than two months as the dollar slid to a record low against the euro amid concerns of the economic impact of US subprime-mortgage defaults.

Gold for immediate delivery in London dropped $19.87, or 2.5%, to $792.08 an ounce as of 5:21 p.m. local time.

It has declined 6.4% since trading at a 27-year high of $845.84 on November 11. The metal was ‘’overbought’’ at that point and may still fall to $750 in the next three to six months, Faber said.

‘’I don’t know of any market that goes up in a straight line,’’ he said. ‘’A continued correction from here wouldn’t surprise me; it’s a correction, a setback, in an ongoing bull market.’’

Faber’s 2008 forecast echoes that of London-based research company GFMS Ltd. Gold’s rally may extend to $1,000 because of ‘’very strong investor interest,’’ GFMS Executive Chairman Philip Klapwijk said on Nov. 2.

UBS AG, Europe’s biggest bank by assets, lowered its one- month estimate for gold on November 13 to $750 an ounce, a week after raising it to $850, saying bullion’s rally was overdone.

Gold demand rose 19% in the third quarter, led by a sevenfold increase in investment in exchange-traded funds backed by bullion, the producer-funded World Gold Council said yesterday. Demand increased to 947 metric tonne from 796 tonne a year earlier, according to the London-based industry group.