bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

GOLD'S long-term prospects are still bright, according to chart analysts, but bulls may have to wait at least a year before they see prices really take off.

    ''There is every reason to believe that based on gold's performance over the past three or four years, the market is very capable of sustaining much higher prices,'' said Cliff Green, technical analyst with Trend Analysis.

    His analysis, based on trading cycles, gives gold a longer-term target - somewhere in the mid-US$500 range - although he admitted the timing of any rally was more difficult to judge.

    ''We are talking about something happening in a year's [time] or even two years' time, it's certainly not just around the corner,'' Mr Green said.

    Bullion has been held in a narrow trading range between $368 and $395 an ounce all this year and, according to analysts, is showing little sign of breaking out either side in the near term.

    ''We are still in a long extended consolidation that started last December,'' said Anne Whitby of Chart Analysis.

    But analysts say its present price just above $380 is expected to give the market a base from which to attack and possibly break through recent highs over the next few months.

    Gold last traded above $500 in December 1987, as the metal benefited from investors fleeing the global stock market meltdown.

   But the rally was short-lived and during the following year prices slipped back to below $400.

    The market's nadir came in March last year when gold fixed in London at its lowest point for seven years at $326.10.

    ''That low effectively completed the bear cycle and we are slowly seeing signs of coming out of that now,'' Mr Green said.

    Ms Whitby said that a significant price rise was possible this year but more likely next year.

    She said the market could target $425 initially and then $450 before surging further.

    ''I would be very surprised if we didn't test $500 at some point,'' she said, adding that even higher prices were possible.

    ''But there is a lot of resistance up around the $500 mark,'' she said, referring to the peaks around $500 reached in early 1983 and December 1987.

    Chart analyst Brian Marber of Brian Marber and Associates said gold's present technical picture fulfilled some of the criteria for the existence of a bull market.

    He said its ability to hold above the one-year average, presently about $378, and its recent bounce off an uptrend support line drawn from the March low last year, went some way to confirming the bull market with $420 as an initial target.

    ''It still needs to prove itself,'' Mr Marber said, indicating that since the August peak last year, the January and June highs this year had been successively lower.

    And other analysts predicted a more minor rally, closer to the present.

   ''I can see gold going to perhaps $450 within the next six months, but then the market will bomb out,'' said Robin Aspinall, chief strategist at Panmur Gordon.

    ''There just isn't the fear of inflation around and gold needs that. We are also starting to see higher world interest rates coming through, which will work against the market,'' he said.

    But Mr Aspinall said that the one unknown factor which could certainly help gold in the future was the possible explosion in demand from a more financially sophisticated Chinese population.



Analysts see golden rally down the road