Gold tipped to hit US$1300

The price of gold could reach US$1300 an ounce by next year, research published yesterday suggested, as the commodity hit an all-time high spot price of US$1267.2.

The metals consultancy GFMS said that worries about the strength of the economic recovery and renewed concerns about a sovereign debt crisis were likely to push up the price of gold.

"Investment will be given an extra impetus if we see another worsening of the sovereign-debt crisis in Europe, which is reasonably possible, and if we see concerns growing in the US," GFMS chairman Philip Klapwijk said.

Low interest rates and possible further quantitative-easing by the Federal Reserve would also support gold, he said. Yesterday's highs mark a 15 per cent rise in the gold price since the start of the year, even as the increase had been checked in recent months after crises in places such as Greece appeared not to spread.

December gold futures followed the spot price, rising to an all-time high of US$1268.

"Gold and silver are moving higher because of the uncertainty in the economic conditions," Ng Cheng Thye, Singapore-based director with Standard Merchant Bank said yesterday.

Rallies in platinum and palladium yesterday also supported bullion and may drive further climbs, he said.

- INDEPENDENT, BLOOMBERG