Gold to prove its mettle soon

Smart Investing

 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

 Notwithstanding all these price drivers, China