Gold price seen soaring above $1,000/oz-Hambro quoted
LONDON, January 7, 2009 – The gold price is expected to exceed $1,000 an ounce in 2009, Peter Hambro, chairman of Russian gold producer Peter Hambro Mining, was quoted as saying.
“How much over $1,000, I don’t know. But there are perfectly legitimate scenarios for it reaching $1,500, even $2,000,” Hambro told the Financial Times.
The price of gold is influenced by a number of factors, such as demand for jewellery, the strength of the dollar, fund investments, investor sentiment – and fears over inflation. Gold is seen as a hedge against inflation.
“The amount of money being pumped into the system is vast,” Hambro said.
“Interest rates get lower and lower and the government is practically buying bus tickets to put more money in,” he added.
“At some stage that money will start chasing real assets, and the deflation you see now will be followed by amazing inflation across the board.”
Spot gold hit an all-time high of $1,030.80 an ounce on March 17, 2008. It fell back as investors sold holdings to cover losses in other markets. Now gold is around $850 an ounce.