Gold, silver will rise in price in 2008

By Tom Stundza -- Purchasing, 1/2/2008 11:54:00 AM

Transaction prices of gold and silver will continue rising in 2008, although the projected increase will be much slower than the explosive inflation of the past two years, according to Purchasing magazine’s latest forecast. Still, investors in gold, the key precious metal, “continue to be attracted by the metal's safe-haven qualities,'' analyst James Moore at TheBullionDesk.com in London wrote in a note e-mailed to the media on December 31. “A recent spike in civil unrest and weakening dollar are stoking gains in the precious metal,” he said.

Earlier, National Bank Financial metals analysts Tanya Jakusconek and Brian Christie projected gold and silver prices higher than 2007 due to “a downside bias” on the value of the dollar, higher inflation expectations due to elevated energy costs and expected further reductions in interest rates. The Montreal-based economists have projected gold at $727/ounce and silver at $14.50/oz this year—in the same ballpark as Purchasing’s projections of $732 gold and $14.49 silver. Meanwhile, three-dozen traders, analysts and investors surveyed by Bloomberg News Service bullishly believe gold probably will average $800.