Reply #18: Slowing economy, weak buck could push gold past $850

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http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BF3D1E4C3%2D2FF4%2D49F0%2DA96E%2D472D5A2DA0EF%7D&dist=newsfinder&symbol=&siteid=mktw

NEW YORK (MarketWatch) -- Gold may post further strong gains in the next two years -- and even surpass the 1980 high of $850 an ounce -- as the U.S. economy slows and the dollar loses ground.

That's the key finding of the GFMS Gold Survey 2006 published Wednesday.

"Levels safely over $600 are now in our sights and further hefty gains over the next year or two are quite possible -- in the right circumstances, the 1980 high of $850 could even be taken out," said Philip Klapwijk, chairman of the independent precious metals research consultancy.

Gold will continue to find support from inflationary pressures and political tensions in the Middle East, retaining its role as a safe-haven investment.

But the metal's gains of the past year have also made it an attractive investment target for institutional investors, seeking bigger returns than are available on stocks and bonds.

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