Gold Market Has the Strength to Support Price at $630/ounce

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The Yellow Book, a twice yearly analysis of global fundamentals and outlook for the gold market, says the risk of sharply lower prices over this period lies mainly in external scenarios of a recovery in the American dollar or a fall in global shares, which remain unlikely.

The gold price is forecast to remain around or above $630/ounce over the next 18 to 24 months as a majority of market trends are expected to support the price.

The Yellow Book, a twice yearly analysis of global fundamentals and outlook for the gold market, says the risk of sharply lower prices over this period lies mainly in external scenarios of a recovery in the American dollar or a fall in global shares, which remain unlikely.

"On the upside, the $700/ounce price level is still likely to be surpassed during the current forecast period, although consolidation above this level is uncertain," said the fourth issue of the book published by VM Group (formerly known as Virtual Metals) and Fortis Bank.

Supporting the gold market is the expectation that significant new quantities of the metal will not come to the market over the next two years and even over the medium term - despite the fact that numerous juniors are focusing on new production and planned expansions of existing operations.

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