On Star Business:
- Tuesday July 21, 2009
Gold prices may rise 20% to 30% by year-end
KUALA LUMPUR: Gold prices are expected to rise 20% to 30% with its spot price hitting US$1,100 per ounce by year-end, on expectations of a rebound in the global consumption of commodities and on rising demand for gold amid declining new supplies, according to OSK-UOB Unit Trust Management Bhd.
The current spot price for gold ranges from US$910 to US$920 per ounce.
- OSK-UOB Unit Trust chief executive officer Ho Seng Yee noted that the annual production of new gold had been falling since 2001.
“However, gold demand has been increasing through traditional demand for jewellery and new investment demands,” he said during the launch of the OSK-UOB Gold and General Fund yesterday.
Ho reckoned that the increase in demand for commodities, including gold, by emerging economies such as China and India was setting the base for a prolonged commodity bull cycle.
“Although commodity demand has fallen in line with the recent economic weakness, we feel that the low per capita consumption levels in the developing world would provide support for a rebound in global commodity demand,” Ho said.
Singapore-based UOB Asset Management Ltd director of equities Robert John Adair noted that historically, gold had performed well despite different economic scenarios such as inflation or deflation.
“It is also a good hedge against paper currency, which has historically been seen to weaken during times of financial crisis,” he said, adding that the US dollar would likely weaken if unemployment rates in the US continued to rise.
“The value of (US-based) assets is likely to fall if consumers lose their jobs and are not able to service their loans.
"This would weaken the US dollar, which has not lost its value since the start of the financial crisis,” Adair said.
Well in a way yes but as an investor, one needs to take into consideration the USD/MYR exchange rate too! This factor should NOT be discounted.
- The OSK-UOB Gold and General Fund is a feeder fund that invests at least 95% of its net asset value in United Gold and General Fund, the target fund, which is managed by UOB Asset Management.
“The fund aims to achieve returns on investment mainly in securities of corporations whose business is, or is substantially in, the mining or extraction of gold, silver as well as precious metals besides oil, gas and coal,” Ho said.
In the past, the target fund has provided returns of 14% to 15% per annum on an annualised basis, according to Ho.
The OSK-UOB Gold and General Fund, which has an approved size of 800 million units, is being offered at an initial price of 50 sen per unit.
The offer period is from July 21 to Aug 10 and the initial minimum investment amount is RM1,000. ( Source: here )
Gold may rise 20-30% by year end????????
Massive prediction.
Gold price is now $948.80.
A 20-30% increase means gold should be $1138 to $1233 by year-end.
LOL!
Who wanna bet against such prediction??? :p2
ps. here is kijang prices.
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6 comments:
OMG! Another gold fund/etf/trust/derivative or Ponzi Scheme being promoted ? Why is it so hard for all the world fiat money central bankers to revert for currency that r back by REAL PHYSICAL gold ?
Apparently, they know nuts abt current prices. They just take ppl money and feed them into an Index fund, to earn commission.
If you talk to their sales personnel and even managers, they dont even know how gold is related to CRB index, dollar index, its historic correlation to crude, silver, platinum, miners etf.
You do a better job acting as a sales agent for their funds. Ever thought abt that..?
My take.
Buy the Kijang at MBB or Maple Leaf at UOB and hold for 3 - 5 years to see significant returns.
Or buy Real Gold China (HKSE) miner. Check this out, Moola...
lol.. thanks for the tip. :)
lol ...
http://www.theedgemalaysia.com/business-news/129208-gold-could-top-us1000-within-6-months.html
KUALA LUMPUR: Prospects of gold trading above US$1,000 (RM3,570) an ounce (oz) by year-end remain, as rising expectations of a weaker dollar pushes up demand for the precious metal.
Singapore-based UOB Asset Management Ltd director Robert Adair said gold has been bouncing off the resistance level of US$1,000 since March last year.
“Every time the price neared that level, it retreated. But this year, the price retreat was less. So, it is highly likely that there will be a strong movement through the US$1,000 level this time. There is potential for a sharp upward movement of the price,” he said after the launch of OSK-UOB Gold & General Fund yesterday. The fund allocates the bulk of its assets in mining companies.
He said a 10% increase in the price was not a demanding assumption. “Gold could shoot up. A reasonably conservative view is that gold may reach US$1,100 by the end of this year,” he said.
Spot gold traded 1.7% higher at US$953.45 per oz at 6.44pm yesterday. Gold saw a roller-coaster ride last year after it hit a closing high of US$1,002.95 in March 2008 before dipping into the US$800 region. It went back up near the US$1,000 level in July this year.
“In the second half of 2008, it was an extremely volatile environment, which saw gold plummet. This year, the gold equities outperformed and gained what was lost last year,” said Adair.
Gold had been trading above the US$900 level for the most part of this year, peaking at US$992.90 in February.
Adair said that while the annual demand for gold was about 3,805 tonnes, mine production for the metal was only 2,416 tonnes. There has also been a significant reduction in capital expenditure of gold producers which would further tighten supply of the commodity and impact the market by 2011.
Central banks have reduced their gold selling activities, further squeezing supply of gold, Adair added.
“There is potential for a gold price revision. If that happens, the target price for underlying (gold-related) equities could climb by 20% to 30%. I would expect the third and fourth quarter figures to be better,” he said.
He said commodity in general would have a good run in the short term of three to five years with high demand from developing nations.
“However, there is a worry that during this period, there may be certain commodities that could see a sharp increase in price due to over-demand and we have not found any new feasible greenfields,” he said.
The fund has an approved size of 800 million units, which are available for subscription from July 21 to Aug 10 with a minimum investment of RM1,000.
promosi hebat eh?
:p2
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