Greenback blues good for gold

摘要

A leading North American financial institution believes there is a "mountain of evidence" supporting the case that gold prices will remain high. According to CIBC, a number of compelling reasons exist as to why the performance of the yellow metal should strengthen further in 2004 and remain above the 400 US dollars/ounce mark. The downward trending US dollar, stable central bank sales and only a modest growth in supply were the main factors behind the much improved market conditions for gold. Given gold was typically traded in US dollars and "we don't see that changing anytime soon", CIBC said the greenback would continue to have a strong impact on gold prices. "Many macroeconomic factors -America's huge fiscal, trade and current account deficits key amongst them - lead us to believe that the US currency will fill further relative to the broader basket of currencies and perhaps the euro, lifting gold prices as 2004 unfolds," the company said in an investment note issued during the March quarter.