Gold could hit $3,000 an ounce

Gold just keeps rising. This week it hit a new record high above $1,260 an ounce. Ongoing jitters over Europe helped underpin prices. In addition, the news that Saudi Arabia's central bank had upwardly revised its estimate of its gold reserves was a reminder that "central banks are keen on the metal after two decades of selling" bullion, says Javier Blas in the FT.

Gold may now be set for a correction, however. Strong recent gains have left it vulnerable to profit-taking. As Dominic Frisby points out in our free daily email, Money Morning, the summer season is traditionally weak for gold. Moreover, gold stocks have been trailing the metal, which often presages a setback.

Still, the long-term outlook remains compelling. Supply is tight and there are plenty of potential worries to fuel demand for a safe haven. The eurozone could well break up. Fears that central banks could debase their currencies even further by printing yet more money are likely to intensify as a double dip becomes more likely. So David Rosenberg of Gluskin Sheff sees the yellow metal reaching $3,000 an ounce.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.