Amidst a shocking fall of global stock markets, gold rose to almost $1,780 per ounce on 9 August in spot trading as investors sought a safe haven. In the wake of the narrow evasion of a US default on its sovereign debt and an apparent lack of a solution to deal with the burgeoning Eurozone debt crisis, markets have been in turmoil. As a universally respected store of value in troubled times, gold has become an attractive option.
Major banks and funds have followed this news with fresh predictions on the direction of the gold price. Goldman Sachs raised their 12-month target from $1,730 an ounce to $1,880, whilst JP Morgan gave the bullish forecast of $2,500 by the end of 2011. With such optimistic predictions in abundance, it would appear that the popular appetite for gold cannot be easily sated. As an assistant portfolio manager at Haber Trilix Advisors put it; “gold acts as the only currency that you can’t print more of, and you are seeing a huge institutional demand for it.”