Soon, Gold at $1600/oz.

Source:

". . .prediction was tied directly to the oil price."

Those who are wondering where gold is headed, here is the answer. The yellow metal is all set to hit $1,600 mark in the coming months. If the predictions of the head of one of world's biggest gold mining companies come true, that is.

After watching the gold price movement, Nick Holland, chief executive of South Africa's Gold Fields, the world's No. 4 gold producer, said the yellow metal is set to cross $1,600 an ounce in the next six to 18 months. He added that his prediction was tied directly to the oil price.

He said some people say oil is going up to $100 a barrel in the next six to 18 months. If that's true, and if you look at the long-term relationship between gold and oil, you should find that gold would go to $1,500 to $1,600.

Another analyst said gold will be a reliable investment over the next few years, but it's unlikely to climb to $1,600 unless there are big changes in the global financial markets.

In a review of the metal, the Royal Bank of Scotland confirmed that gold was a good store of value during financial crisis and advises investor is to have some exposure.

But it says it has not changed its forecast price which, for 2010, is about $1,000.

The Association of Mining and Exploration Companies' chief Simon Bennison said gold producers had a very optimistic outlook over the next 12 to 18 months.

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