The price of gold yesterday retreated from a 25-year high reached earlier this week, but local gold bulls said fresh highs were in store this year with some seeing magic numbers going for Hong Kong to back their faith in the yellow metal. Brushing aside a correction in the spot gold price to US$567.50 an ounce yesterday from a 25-year peak of US$572 on Tuesday, the president of the Chinese Gold and Silver Society said: 'The price of gold is set to hit US$650 this year and is very likely to reach US$800 in two to three years.' Alvin Ching said driving those gains would be a rapidly growing number of private investors 'especially from the increasingly affluent markets of India and China'. Savvy savers in these markets would turn to gold to hedge against the possible slump of the US dollar on its mounting twin deficits, said Mr Ching. That demand would fuel fresh highs for bullion, he predicted. For the magically inclined, there was a signal too from bullion trading in Hong Kong, where the price is quoted in taels (equivalent to 1.20337 ounces). In Hong Kong trade yesterday, gold opened $46 higher at a lucky number of $5,228 per tael from a close of $5,182 on Friday last week - the last trading day in the Year of Rooster as the dollar strengthened against the euro and oil declined. Mr Ching said that the gold market was entering the second phase of a bull market with dollar exchange rates and oil prices in the Middle East driving buying interest. He said this was a period when the public began to be attracted to gold. 'While thinner volume and broader trading ranges encourage speculators to enter the market, fund managers buying precious metals and commodities [to diversify] their portfolios were also driving up gold prices,' said Anderson Cheung, deputy managing director of Mitsui Bussan Precious Metals. Mr Cheung expected the gold fever to continue with prices hitting US$620 to US$650 an ounce this year. However, a more cautionary note was sounded by Jonathan Barratt, head of foreign exchange and precious metals at Tricom Futures in Sydney. 'Having breached US$572 an ounce on Tuesday, our failure to remain above $570 is starting to send signals to the market that perhaps we are losing a bit of steam,' Mr Barratt told Bloomberg. 'If it does break through US$565, you're going to get a very quick exit by a lot of punters selling off, taking profits.'