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More News Gold shines brightly, but it’s at its peak The perception held by many investors that retreating to gold is a sound value decision and a safe haven against global commodity and equity market collapses has come under question. In addressing a recent conference in Australia , Westpac Economic Research senior economist Justin Smirk said gold had a good future “but is close to its peak priceâ€. He said, “It will continue to do well but will be outperformed by other rebounding commodities which will move faster as economies recover. “Gold is a good buy now as a hedge but perhaps not for much longer in terms of comparison against other metals. “The world deflationary spiral is keeping gold below US$1000 an ounce and I don’t expect it to get back above that, or not by much, for about two years. “In real terms and looking at the past 100 years, gold’s value in Australia has not returned to inflationary levels of the 1980s, which is around the equivalent of US$1600 an ounce. “The metal will need an outbreak of inflation to have a strongly positive future but that means other commodities will also benefit at the same time and I would expect, outperform gold in every way, so on that basis, we question the perception of its true value.†Westpac’s forecasting suggests a gold price of around US$914 an ounce in 2010, rising to US$1063 in 2011 and US$1150 in 2012, however the bank’s own parallel forecasts for copper suggest the copper price performance would outperform gold over that period on a percentage basis. The current rush to gold was hardly surprising as cashed up China and European economies - which would have invested a large share of their funds in the US - have turned away from that due to the American economic downturn and gold has been a short-term benefactor. 
Yolanda Torrisi Managing editor The ASIA Miner More News
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