Gold price could soar to $700/oz this year: analyst

Gold price could soar to $700/oz this year: analyst

Zurich, Switzerland (Platts)--26Apr2006

The gold market rally will continue and the metal's price could finish
out 2006 at or above $700/oz, said Canadian analyst Martin Murenbeeld
Wednesday at the Denver Gold Group's annual European Gold Forum in Zurich. The
likeliest price scenario would see gold's 2006 average price at $637/oz, a
year-end price of $728/oz, and a 2007 average price of $789, Murenbeeld said.
A year ago he predicted a 2005 average of $440/oz, and the actual average was
$444/oz.

While the US dollar fared reasonably well in 2005 against other
currencies, it is due for a downside correction of between 15% and 25%, said
Murenbeeld. "The fourth quarter 2005 current account deficit was over 7% of
GDP. This throws nearly $4 billion a day into foreign exchange markets. This
$4 billion has to be absorbed; if not, the dollar falls."

Because of dollar inflation over the past decades, the gold price has
just recently caught up to its 25-year average when valued in constant
dollars, according to Murenbeeld. He added: "Gold is also very cheap in terms
of oil. It takes less than 9 barrels of oil today to buy one ounce of gold,
not an average of 17.5 barrels. If gold was priced at its average oil price,
the gold price would be above $1,000/oz."

Nick J. Holland, CFO of South Africa's Gold Fields also forecast a
year-end gold price of $700/oz in 2006. He said he doubted whether the Rand
would weaken against the dollar this year.

--David Bond; newseditor@platts.com

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