The spot price of Gold gained over $50 an ounce this morning in London to reach $1722.28 after hitting a six-week low recently.
Holdings in gold-backed exchange traded products were also down to 2,581.9 tons from a high of 2,583 tons on October 11th. While David Govett, the head of precious metals at Marex Spectron Group believes that ‘there are plenty of buyers beneath the market’ who are ‘not willing to chase it excessively higher,’ Polymetal International’s CEO Vitaly Nesis has even speculated that it could rise to $2000 an ounce within the next six months. Richard O’Brien, CEO of Newmont has even speculated that gold could rise to $3000 over the next 3 years as banks buy gold in an attempt to diversify their portfolios and protect against inflationary pressures.
The Federal Reserve is due to decide whether to change its stimulus policy on the 24th October and there has been increasing pressure on the Bank of Japan to increase its stimulus package after Japan’s shipments were down 10.3% year on year. This matters because stimulus packages have increased the money supply, which has made gold more attractive to many investors as an alternative to currencies.