- China Overcapacity Worsening, EU Chamber Warns
- Investing in Good Karma – and Making a Profit
- Black Friday to Avoid Red Ink; Greenback Gets the Blues
- Bankruptcies Jump, Hitting Highest Level in Four Years
- Steepest Black Friday Discounts, Revealed
- Fed to Counsel Moviegoers on How to Use Credit Cards
- Where Do Pardoned Turkeys Go?
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Judge Erases Couple's $525,000 Mortgage Payment
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
MOST SHARED
- The Executive Job Search
- Where Do Pardoned Turkeys Go?
- Chinese Overcapacity is Worsening, EU Chamber Warns
- US Mint to Suspend American Eagle Gold 1-Ounce Coins
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- Salvation Army's Kettles Now Credit Card-Ready
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Trader Talk
- Oil Friday
Text Size 
The current dip in gold prices is temporary and demand for the precious metal is likely to rise in the medium term, Ronald-Peter Stoferle, international equities analyst at Erste Bank, wrote in a market note Wednesday.
"We would seize the current opportunity of general profit taking to buy as soon as the short-term downward trend is over," Stoferle wrote. "We regard the current consolidation as a good buying opportunity and envisage higher gold prices in the medium to long term."
Demand for gold, seen as the ultimate safe haven against inflation and a good instrument for diversification, is likely to continue rising, he said.
Total demand for gold is around 3,600 metric tons but global miners produce only around 2,450 metric tons annually, with the deficit compensated by central bank sales and recycling, said Stoferle, adding that the gap between demand and supply widened last year and was likely to continue to do so.
Robust jewelry demand as well as industrial demand might come down slightly in 2008, but the central banks in Russia, China and the Arabic region will want to decrease their dependence on dollars, he said.
"Even if only a small percentage of the (petro) dollars gets funneled into gold investments, this will trigger another price leap," Stoferle said.
Gold, which currently trades at around $889 an ounce, reached an all-time high of $1,034 in mid-March.
Print
Email
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.
Data is a real-time snapshot *Data is delayed at least 15 minutes