French broker Société Générale has tipped the gold price to continue to rise as it recovers from heavy losses earlier in the year.
The spot price of the precious yellow metal has risen 16% since mid-June to US$1,391 an ounce, up US$15 today, having suffered due to fears over the Fed’s plans for quantitative easing and falling demand from China and India.
But SocGen thinks the revival can continue as long as the price stays above US$1,304 an ounce, in which case it could climb as high as US$1,474 an ounce.
If it falls below this mark, then the price could be set for a correction towards US$1,276 an ounce.
The gold price has continued to take baby steps forward, with Mike van Dulken of Accendo Markets attributing the latest phase of the gold rally to the uncertainty surrounding the ‘tapering’ of America’s fiscal stimulus programme.
He claims “grouping of multiple, long-term trend lines” point to a target of US$1,500 an ounce.
Meanwhile, recent figures from the China Gold Association revealed consumption grew by 54% in the first half of the year, which may help support the revival.
Randgold Resources (up 1.9% to £51.35)
Fresnillo (up 1% to £12.27)
African Barrick Gold (up 4% to 166p)
Mwana Africa (up 44% to 1.8p)