Thursday, 21st September 2006 (4446 views)

According to a Mineweb report, precious metals market analysts have predicted that despite the risks and costs currently associated with gold investment, prices would regain strength by the end of 2006.

BMO Capital Markets analysts Geoff Stanley and Heather Douglas cited the increasing distrust and insecurities of investors that surround the US dollar and concerns over the American federal deficit.

Further deterioration in the global political environment, which has recently seen strained relations between the United States and Iran, may also contribute to gold regaining some of its sparkle on world markets, Stanley and Douglas noted.

"Consolidation activity in the sector has begun to pick up after a slow start," the two analysts confirmed. "We expect that consolidation will continue, with the primary drivers being valuation differentials and growth."

The price of gold is currently slumped at a three-month low of around $572 an ounce.

 

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