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marketmineron May 03, 2007 12:57am
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Gold price ''to keep rising''
Gold price ''to keep rising''Gold price 'to keep rising'
02/05/2007 15:27
By: Evan Pickworth
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Johannesburg - The price of gold will continue to climb while strengthening demand is not met by adequate supply, says Lear Financial, a US gold coin company.
Lear Financial claims that there is a "good chance" the price of gold in 2007 will exceed the 2006 high of $725 per ounce and this upward trend is likely to continue into 2008.
"In China (the world's third-largest gold consumer and fourth-largest gold producer) there is a long-term shortage of gold," says Lear Financial's gold investment advisor, Kevin DeMeritt.
China's annual consumption is about 200 tons, while its production equals roughly 180 tons a year, Lear adds.
"It is difficult for China to maintain major long-term growth in gold production because of limited resources and production capability," the company says.
"As a long-term solution the world's largest 20 gold producers are combating these critical shortages with increased exploration budgets, but in the short term gold prices will continue to climb," the company adds.
Lear Financial reports that the discovery rate of major gold deposits has declined in each of the last eight years, while the demand for gold by investors and industry has increased.
"Investment demand, jewellery demands and high-tech industry demands continues to strengthen, but this stronger demand is not being met by world-wide gold producers thanks to declining production - from South Africa in particular," concludes Lear Financial.