Gold price will reach $1,000/oz by year end - Paul Walker, GFMS (Source: Miningmx)

In an interview on ClassicFM @ 18:15 on Wednesday, 16 January 2007

[miningmx.com] -- THE gold price was likely to reach the $1,000/oz level by the end of the year, said Paul Walker, CEO of GFMS, a company that analyses the gold and other metals markets.

“I would certainly not discount that at all," said Walker on a four digit gold price. "This is a matter of just how severe the crisis in the US turns out to be."

He added: “So I think there is a hell of a lot of nervousness out there and it won’t take a lot of this nervousness to push gold up by another $100."

The gold price broke through $900/oz last week, but has since retreated again and was last trading at $880/oz.

Speaking on Classic Business, a week-nightly radio broadcast, Walker said the speed with which the gold price had moved had been a shock.

“Our house view at GFMS for the better part of six years has been bullish," said Walker. However, the group believed a price of $900/oz was about two years away. "It’s probably reached those levels a little quicker than we anticipated."

The backdrop to a higher gold price has been the sub-prime crisis, a condition that did not seem to be "going away", said Walker. In addition, there were rising fears about the health of the US economy.

Commenting on China’s relatively new position as a prominent gold producer, Walker said the flow of metal from the country suggested it had a great mining capacity.

“Over the last fifteen years the production profile has ratcheted up dramatically and according to our data, China will at some point overtake South Africa as the world’s biggest gold producer.”