Gold Prices Heading Up

May 22, 2002

Gold Prices Heading Up

Gold traded at $315.80 an ounce on May 21 and is up more than 13% this year, prompting some analysts to predict it could go as high as $340-$350 an ounce, reports the Wall Street Journal. In fact, gold has been staging a substantial rally for more than a year, says WSJ, leading it to state the bear market that has persisted since the early 1980s for gold may finally be over.

Though no one is predicting gold will spike back up to its legendary high of $800 an ounce in 1980, analysts are saying it might stay over $300 an ounce for a while. John Roque, an analyst for Arnhold and S. Bleichroeder who has been bullish on gold since late October, has a $340 an ounce target, while Leonard Kaplan of Prospector Asset Management, said the price could go as high as $350.

Bullion specialists attribute the rise in price to the weaker dollar, uncertainty over the U.S. economy's recovery and heightened tensions in the Middle East. Other experts say the rising price of gold signals that investors expect inflation to come back. But skeptics of a continued rise in gold prices say central banks in Europe have too much gold and will be perennial sellers, and there are few industrial uses for gold.

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