Although gold has fallen victim to broad-based liquidation and U.S. dollar strength in September, it remains “intrinsically more sound than most, if not all” other financial safe-havens, according to GFMS.
The metals consultancy firm contended that the yellow metal remains the preferred safe haven asset – over U.S. Treasuries, German government bonds and the Japanese yen – despite its recent weakness. One factor likely to continue boosting gold prices is central bank purchases, according to GFMS via the Wall Street Journal.
Paul Walker, global head of precious metals at GFMS, recently commented that while strong buying from China and India will continue to support high prices, in order for the yellow metal to reach $2,000 per ounce, greater investment demand will be needed.
There has been “tremendous demand figures coming out of the India in the last day or two,” Walker noted. In addition, he added that investment demand from Western nations is likely to return to the gold market.