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    Gold could rise by $30 an ounce - Aussie bank -


    Posted: 05/29/2002 07:00:00 AM | © Miningweb 1997-2001


    SYDNEY - Gold could rise by another $30 a troy ounce in the next few months should the U.S. continue to build support to remove Iraqi leader Saddam Hussein, the Commonwealth Bank of Australia said Wednesday.

    "The U.S. appears to be trying to build support to remove Saddam Hussein from power. Action towards (that) could be expected to add $30/oz to gold," the bank said.

    Dow Jones reports that would be the latest political development to boost gold's status as a safe-haven investment tool, apart from the ongoing tensions in the Middle East and the recently heightened conflict between India and Pakistan, the bank said in its latest monthly precious metals report.

    However, if gold rose by another $30/oz, producers, central banks and funds could be tempted to sell, the bank said.

    Tuesday, the Pentagon said U.S. warplanes struck Iraqi air defense targets in a northern no-fly zone after the latest of an increasing series of Iraqi challenges to coalition jets patrolling zones in the north and south.

    Spot gold rose Tuesday to a high of $325.75/oz, according to traders. That is the highest since $327/oz notched Oct. 8, 1999.

    A weak U.S. dollar, fuelled by concerns in the pace of the U.S. economic recovery, together with the poor performance of U.S. equity markets and geopolitical tensions, have been the key factors spurring the gold price rally.

    "Worries over the Middle East will also keep gold investors keen, as the security of oil supply to the West becomes a threat," the bank said. As such, the CBA again raised its gold price forecast, to average $312/oz in the current calendar quarter ending June 30, from $305/oz in its last report issued May 1. That was in turn a $10/oz rise from an earlier report.

    Spot gold averaged $290/oz in the first quarter of this year.

    The bank also raised its forecasts of the average gold price for the third quarter, by $10/oz to $320/oz, and for the fourth quarter, by $15/oz to $330/oz. Its Wednesday report forecasts spot gold to average $325/oz in the first quarter of 2003, $5/oz higher from the bank's May 1 report.

    For the next three to 12 months, the bank forecasts gold to trade in a $295-$335/oz range, as central bank and producer selling may cap the price above $335/oz.

    Over the next few weeks however, technical charts indicate gold could drop "in a congested manner back to $310/oz," as its "rally is ready for a pause" after its rise over the last two weeks led to an overbought momentum condition, the bank said.

    But the bank expects the rally to resume towards the end of June, adding that "prices will be susceptible to a fast acceleration towards the final objective at $345/oz," with it peaking in mid-July.

    CBA kept that pretty quiet.........I found it on a US site.

    Cheers, Nick
 
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