Wednesday, April 14, 2010

Greece bailout might increase gold prices

The recent plan to help bail out the struggling Greek economy will have a positive effect on the gold market.

That's the assessment of GFMS Ltd. Executive chairman Philip Klapwijk, who, according to Bloomberg News, told a precious metals meeting that gold could reach up to $1,300 per ounce as investors look for alternatives to bonds.

By the end of trading Monday, gold had slipped from a high of $1,170.70, to close the day at $1,160.10.

Analysts like James Moore from feel that there is still plenty of growth potential for gold.

"Gold still needs to close above $1,162 to confirm the upside breakout," Moore said in his daily metals report Monday, according to The Street. "Gold still has room before entering overbought territory and is well placed to push on towards the $1,200 mark."

However, the earlier sentiment about gold prices was tempered by a revision in the 2010 and 2011 gold forecast by Goldman Sachs. Although the bank still sees gold hitting record highs in 2011, it reduced its 2010 forecast from $1,265 to $1,165 an ounce and its 2011 numbers to $1,350 an ounce from an earlier forecast of $1,425.