By Yvonne Tan PETALING JAYA The Star and Asia News Network
Gold prices are expected to scale higher at least over the next one year before the gains are capped, given the economic uncertainties in advanced nations and the volatile U.S. dollar, analysts said. Gold is the beneficiary of all that instability in the markets right now, Scott Meyers, senior trading analyst with Pioneer Futures division of MF Global, told Dow Jones. Goldman Sachs, in a recent research report, reiterated its forecast for the yellow metal to rise to US$1,690 an ounce over the next one year but said the gains would peak at US$1,750 an ounce in 2012 on expectations of strong U.S. economic growth and hence a firmer greenback. “As we look toward 2012, we find it timely to reiterate our view that at current price levels gold remains a compelling trade, but not a long-term investment,” the investment bank told its clients. Investors switched their focus to buying gold last Friday, playing on its safe bet status after the U.S. dollar, also another safe haven option, demonstrated its volatility falling steeply on disappointing job and economic data in the United States. Spot gold broke past US$1,400 an ounce on Friday the first time since Nov. 9 after data showed U.S. jobless rate unexpectedly hit a seven-month high.