ThegreenbackisunderpressureastheweakeningUSeconomyhaspromptedinterest-ratecuts,andwithanothercutexpected,“theoveralldollartrendwillremaindownwards”,saysWilliams。

Geopoliticaltensionsandhighoilprices,whichbolstergold’sappealasaninflationhedge,areunderpinninggold,whilejittersoverthecreditcrisisarefuellingsafe-havenbuyingandprovidingafurtherspurforspeculatorstoenterthemarket。

Thefundamentalsalsolookencouraging。

AsNormannotes,demandhasrisenoverthepastfewyearsastheadventofgoldfundshasmadebuyingeasierforretailinvestors,whileglobalgoldproductionisfalling。

IthasplummetedinSouthAfrica,thetopsupplier,andpeakedinRussiaandCanada。

Productionislikelytoslideinfutureasthediminishingnumberofnewreservesfailstocompensatefordyingmines,reckonsCreditSuisse。

Thegoldmarkethasalreadybeenindeficitforthepasteighteenyears,exceptforthreeoccasions,withtheshortfallinsupplybeingoffsetmainlybycentralbanksales。

Butthesearelikelytowitherinfuture,saysCreditSuisse。

Someanalystsreckoncentralbankshavebeenbuyinglatelytodiversifytheirholdingawayfromdollars,sothemarketwillbecometighterasjewelleryandinvestmentdemandrise。

Talkof$1,000goldin2007or2008wasdeemedextremeonlymonthsago,saysWilliams。

Butnow“itcouldhappen”。

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