Gold will Rise - Globe and MailBy ANGELE BARNES
Wednesday, October 12, 2005
Globe and Mail Update
TORONTO — The price of gold has already risen significantly since the beginning of the year, but it stands to go even considerably higher still, according to Canaccord Capital Corp., which has just boosted its estimate of the peak gold price over the next 12 months to $525 (U.S.) an ounce from $485.
Gold began the year at around $437 an ounce. It went on to set a succession of 17-year highs, the latest of which came early yesterday when the price touched $483.10, the highest since January, 1988. It subsequently fell to close Wednesday at .
Steven Butler, who follows the sector for Canaccord, bases his favourable view of gold on a number of factors, including the concerns about inflation or stagflation, the relatively low interest rates, the outlook for the U.S. dollar and gold supply/demand fundamentals that are supportive of the gold price. Ongoing geopolitical risks and uncertainties also contribute to the upbeat story on bullion.
Mr. Butler also noted in his report yesterday that this year's advance notwithstanding, gold has substantially underperformed other commodities, including oil and copper. Since January, 2004, gold is only up 14 per cent, while oil prices have climbed 90 per cent and copper prices 70 per cent.
And he pointed out that the ratio comparing the price of gold to that of oil, while it is higher than it was on Sept. 1, is still near record lows.
*** That is helping Campbell significantly ***