Citigroup Remains Bullish on Gold

Source:

Longer term, mining and metals analyst John Hill said "we would not be surprised to see gold double from current levels as the global policy prescriptions for the credit crunch remain powerfully and uniformly re-flationary."

Profit-taking by investors on a firmer U.S. dollar and a seasonal slowdown in fabrication may be working against gold, but spot prices continue to remain strong near the $920 per ounce mark. Bullion could climb much higher if things donít change significantly, according to a new report from Citigroup.

Mining and metals analyst John Hill said the mix of macro and supply/demand factors, along with the same forces that have pushed gold higher for the last five years, give him good reason to remain bullish on gold. He sees prices climbing through 2009 and 2010, but a significant lift may not come until the fall when fabrication constrains supplies.

The analyst told clients:

Longer term, we would not be surprised to see gold double from current levels as the global policy prescriptions for the credit crunch remain powerfully and uniformly re-flationary. Citigroupís gold price forecasts are $906, $950 and $1000 for 2008 through 2010. Gold prices averaged $924 per ounce in the first quarter, a 18% quarter-over-quarter increase, and climbed above $1000 on March 17.

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