THE gold bullion price increase which characterised the last quarter of 2009 is expected to continue in 2010 following increased demand on the global market.
According to the investment company, Investec’s gold price analysis, the upsurge in the precious commodity is driven by continued weakness in interest rates.
The increase in gold prices is expected to transform the fortunes of the mining sector left in a financial mess after the global economic crisis swept through the world economies.
The increase in gold prices next year comes amid the mass consumption of gold from the International Monetary Fund reserves by Sri Lanka and India.
The price of gold is expected to reach a record US$1,300 per ounce after surpassing the US$1,000 mark in the last quarter of 2009 despite the mining sector experiencing fluctuations in production.
According to Investec, the surfacing of India and China on the gold market means developing economies are also playing their part in the gold sales. Investec said the participation of developing countries on the gold market will transform most developing nations’ central banks from net buyers of gold to net sellers of the commodity.
The analysis by Investec also says the growth of the gold market will also create a broader market base for African gold producers hence more revenue. Gold closed the November trading month at an all-time high of around US$1,200 setting a platform for prices to increase in the first quarter of 2010.
