Amid credit crunch, gold may be safe haven

HONG KONG: The price of gold will likely hit $1,000 per ounce next year, on speculation that international capital will flow to bullion markets, say pundits. Gold may become a safe haven for investors concerned about the credit crunch.

Gold will likely regain the momentum it had earlier this year, when international prices reached a record high of $1,002 per ounce in March in view of imminent inflation, said a World Gold Council investment manager. The high prices tapered off in July, as the global economic downturn loomed, eventually bottoming out below $750 per ounce.

"Many countries are still under the threat of inflation, creating a strong demand for gold to hedge against a material hike," said Natalie Dempster, a World Gold Council investment manager.