Gold could strike record 1,100 dollars
Photo : AFP
"The consultancy believes (gold) could easily re-attain the 1,000-dollar mark and may well push up towards and perhaps even through the 1,100-dollar barrier," GFMS said in its annual Gold Survey that was published on Tuesday.
"The report singles out the fiscal and monetary policies currently being enacted, especially by the US administration, as the root cause... through their ability to generate inflationary pressures," GFMS added.
"GFMS also expect central banks to be reluctant to raise interest rates whilst the prospects for economic growth are shaky."
Gold benefits from the prospect of higher inflation because it is widely regarded as a safe-haven investment that can preserve value amid troubled economic times.
However, on Monday gold prices fell as low as 865 dollars per ounce -- a level last seen on January 23 -- as the market was rattled by the prospect of the IMF selling some of its reserves.
But in the London Bullion Market on Wednesday, prices rose to 887 dollars an ounce, from 879.75 dollars an ounce late on Tuesday.
GFMS added in the report: "The consultancy... cautioned that it may well not be a straight-line rally as a summer lull or the need for inflationary pressures to build could mean sub-900-dollar prices in the short term."
Gold prices are currently trading below the record high points forged last year.
The glamorous metal, which is used in jewellery, dentistry and electronics, had struck a record high of 1,032.70 dollars an ounce on March 17, 2008.
Copyright © 2018 AFP. All rights reserved. All information displayed in this section (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the contents of this section without the prior written consent of Agence France-Presses.