Strong buying from China and India will continue to support gold high prices

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 gold high prices, in order for the Gold 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.

There is “every likelihood” that gold “will see a resurgence in investment demand,” Walker added. ”High $1,900-$2,000 is a definite price target for the year.”

The gold price held steady near $1,624 per ounce Friday closing while concerns over a global economic slowdown continued to weigh on financial markets. The spot price of gold climbed to as high as $1,635.80 in overnight trading, but relinquished its gains as the U.S. dollar moved higher against a basket of the world’s leading currencies.