Gold will break out of a narrow band of trading in which the precious metal has been stuck for 12 months and will head towards $1,700 an ounce or higher as central bank moves and production problems increase the demand for gold, analysts told CNBC.
Priced in euro terms, gold posted its highest close of 2012 on Friday after the Federal Reserve’s Chairman Ben Bernanke left the door open for a further round of quantitative easing in a highly-anticipated speech on Friday.
As investors pinned their hopes on hints of further QE, spot gold (Exchange:XAU=) rose nearly 5 percent over the past two weeks, hitting a five-month high of $1,692.71 on Friday, a rise of up to $40.
Gold has risen 70 percent between December 2008 and June 2011, after two rounds of QE by the Fed totaling $2.3 trillion, according to Reuters.
Full Story: Gold to Break $1,700/Ounce Level: Analysts