Gold heads for strong year-end rally: Credit Suisse

A prominent analyst says that gold prices will resume their ascent after a "reality check" period, Reuters reports.

The yellow metal has been surging in the past six weeks and reached a record $1,227 per ounce before dropping back to current levels at roughly $1,145 per ounce.

Tom Kendall, a precious metals strategist at Mitsubishi, explained that while there is still the possibility of a further sell-off, the longer-term trend still appears to be positive.

He told the news provider: "I would sum this up as a reality check for the gold market. We have seen a number of disappointments over the last few days in terms of economic data - Japanese GDP, German industrial production and a drop in SPDR holdings.

"It's going to be a little while before we challenge the highs that we saw last week."

Meanwhile, Eliane Tanner, a Zurich-based analyst at major financial services group Credit Suisse, has also predicted that gold will enjoy an encouraging end to the year.

Speaking to Bloomberg, she noted that the main driving factor is likely to be the dollar, which has traditionally shared an inverse relationship with Gold Prices.

"Momentum is very positive for gold. Weakness in the dollar is expected to go on until the end of the year. Gold could have a strong year-end rally," she told the news provider.

Courtesy: www.bullionvault.com