Wednesday, July 7, 2010

Gold To Rise To $1,500: Yorkville Securities

That institution has a target price of $1,500 within 18 months because of higher inflation coming down the pipe.
“The upside outweighs the downside,” said Brian Kinane, managing director at Yorkville. “It provides a potential inflation hedge and inflation is coming in due course.

“It gives you protection for flight to safety because it’s the global currency that is not subject to quantitative easing,” he added. “I believe gold can move to $1,500 within 18 months.”

“Gold is well priced right now but there are people who have a view that it could go to over $2,000 an ounce,” Kinane said. “I would be of the view that gold has more room to run.”
Also mentioned in the article reporting the forecast is the fact that a near-zero interest rate environment (with inflation still positive) makes for a favourable climate to hold gold because the opportunity costs are minimized.

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