|5 June 2011|
Gold prices will continue to rise in the foreseeable future and may hit $1,800 an ounce by the end of this year due to its strong demand in India, China and other emerging markets, a top official of Pure Gold Jewellers said.
Pure Gold Jewellers chairman and founder Firoz G. Merchant said investors’ appetite for the yellow metal is on the rise due to its better rate of investment returns in the past couple of years.
He said high oil prices, economic instability in major global economies and a fear of a double-dip recession in Europe and the United States also played a key role in attracting investment in gold that keep its outlook bright in the near future.
‘Asia will be engine of growth in days to come and Middle East countries will lead the recovery in global economies as the higher crude prices will help the regional governments to spend the surplus funds on development and infrastructure projects,’ Merchant told Khaleej Times in an interview.
Pure Gold Jewellers, established in 1989, is one of the fastest-growing jewellery houses in the UAE and GCC countries. The group, which counts a jewellery and accessories line in its portfolio, operates 52 outlets in the UAE and has massive expansion plans in GCC and India.
‘Major European countries are facing difficulties to overcome inflation and debt crisis, Japan is hit by a natural disaster and the United States is also not yet come out of the recession,’ he said, adding that tougher days are still ahead for the US and other Western countries.
He said oil prices maintained an upward trend but its volatile trade has shaken investors’ trust in black gold, leaving no other option for them to invest in the yellow metal.
‘I believe oil prices are going to be out of control and will be stable at $200 a barrel during the next couple of years.’
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July rose to $115.12 a barrel from $114.67 the previous week. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for July eased to $99.75 a barrel from $100.35.
‘Amid considering all these situations, investors consider investment in gold a safe bet with a confidence of getting higher profit returns,’ Merchant said. He said gold prices would continue to maintain an upward trend due to higher demand in India, China and emerging markets.
‘Gold prices will be ranging between $1,700 to $1,800 an ounce by the end of this year,’ he said, adding that the prices may be touching the $3,000 mark in three to five years due to strong demand and investors’ faith in the yellow metal.
Gold rose to $1,540 an ounce by late Friday on the London Bullion Market Gold. The metal enjoyed solid gains in recent times garnering support from its status as a safe haven in uncertain economic outlook in major economies of the world.
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