Unlike stocks, gold prices shoot up with every negative event across the globe. Based on the centuries old fact that gold demand shoots up in war-like scenarios, the new threat of global terrorism is expected to spawn a similar effect on the precious metal.
Gold prices are expected to zoom up to as high as $420-450 per ounce in the next couple of years from the current $360. Besides, gold demand is at a near record level of 4,000 tonne a year, while mine production has been steady at 2,250 tonne a year, according to World Gold Council (WGC).
Several studies by the World Bank and Beacon Group advisors point towards a declining production of more than 30 per cent over the next seven years. This means that gold output will drop to 2,000 tonne a year by 2010
