An interesting interview took place in London in September 2010. With gold already fetching record prices per Troy ounce Robert Miller, journalist with the Telegraph newspaper, asked Evy Hambro, Manager of BlackRock’s Gold and General fund, whether the gold price could rise to $1,300 an ounce in the short term and hit $2,000 in the longer term. (Watch the interview here.)
Hambro declared himself “very positive on the outlook for gold” and said it was important when assessing the future price of gold to see the price rising in a range of different international currencies. This was now happening, Hambro said, with high gold prices being registered in dollars, euros, sterling and many other currencies. Pointing to “strong fundamentals” underlying the rise in the gold price, Hambro cited the fact that many central banks are accumulating gold and that there’s also strong demand for the precious metal from jewellery and other sectors.
Asked whether the gold price could go as high as $2000 an ounce, Hambro said that when the price per ounce passed $850 and then $1000, important psychological barriers were broken. Since the underlying investment fundamentals are positive, there’s no reason to put a limit on the price gold can achieve.
The internet, however, is awash with pundits and conspiracy theorists predicting that the “gold bubble” will burst. Some argue that there are sinister legal and political interests at work, that gold reserves are depleted, that major rigging of the market is under way and that the “strong fundamentals” underlying the record price of gold will be exposed before long.