LBMA Sees $1,450 Gold


"Fall in consumer confidence far worse than economists expected."

Gold prices are likely to rise to $1,450/oz. in a year's time, according delegates polled at the London Bullion Market Association annual conference, as the precious metal climbed to a new high yesterday.

That poll produced delegates' estimates for spot silver at $24/oz., platinum at $1,857/oz. and palladium at $702/oz. in September next year.

Regarding gold's main traditional drivers, 64% of respondents said they expected the dollar to be weaker this time next year and 63% saw U.S. inflation rising in the same period.

"The degree of uncertainty out there at the moment is one of the reasons gold has come up," Paulson & Co. Precious Metals Strategist John Reade said in a presentation to delegates.

The gold price shot through a fresh record yesterday after losses earlier in the day. It shot back through $1,300 to trade at $1,307,58 and was last quoted at $1,306,09.

A strong dollar and profit taking saw gold trade lower yesterday morning, when it fixed at $1,289 in London. The latest surge was sparked by weaker-than-expected U.S. consumer confidence and manufacturing data.

The data contributed to the dollar's slump against major currencies, including the euro. The euro was at new five-month highs at 1,3509 during the afternoon session and was last bid at 1,3546.

Private research group Conference Board's index of consumer confidence fell to 48.5 this month from a revised 53.2 last month. The reading was far worse than the 52 expected by economists and is the lowest since February.

"The growing realization that ultra-loose monetary policies may debase currencies is leading to continuing safe-haven demand for gold. Gold is the only currency that can't be debased; its value isn't dependent on the performance of politicians and central bankers," GoldCore analysts said.

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