After its catastrophic drop in price in April, the gold is consolidating rapidly. The price of this precious metal grew by 4.9% and stood at $1,462 per troy ounce. There is no unanimous opinion on this matter: some economists think that this trend will persist, others are sure that this situation is temporary.
The central banks’ measures for stimulating economy motivate the investors to put their assets into gold. The interest rate cuts provoke higher prices of raw materials and gold. “It’s reasonable to say that the currency debasement and easing measures will support gold,” noted Senior Strategist of RidgeWorth Capital Management Alan Gayle. “The bulls still have to prove a lot. There is a lot of skepticism surrounding gold. We need to watch to see if prices have found a near-term bottom”. The same opinion expresses chief of European Central Bank Mario Draghi. Now gold is being bought not only by small investors, but also by large ones. For example, John Paulson promises his clients the further increase despite the great loss totaling $1 bln after the gold collapse. The Kalyan Jewellers chief T.S. Kalyanaraman declared that the gold prices will be up 27% to $1,800 by December 2013.
The other part of analysts do not believe in such forecasts. Primary shareholder of Berkshire Hathaway Warren Buffett is one of them. “No. Gold’s not reproduced or anything since I wrote about it a year or two ago. It just sits there, and you hope somebody pays you more for it. If gold went to $1,000 I wouldn’t be a buyer. If it went to $800, I wouldn’t be a buyer. It’s never interested me. If you go back to 1965, Berkshire was at $15 and gold was at $35, so you could’ve bought two shares of Berkshire for an ounce of gold, a little more than two shares. And so far, two shares of Berkshire’s been better.”
However, the one fact remains indisputable, the ECB actions fuel people's interest in the situation on the gold market.
