Berlin—(Kitco News)—Investment has fueled much of the gold rally to above $1,300 an ounce and reliance on one element for so much of the increase could have some risks, according to Hans-Guenter Ritter, managing director of Heraeus.
Ritter said Heraeus watches prices closely because the company is in a manufacturing business in which precious metals are used. He said at this time industry consumption does not reflect the higher prices of gold.
“On the other hand, investment has become the major theme around the precious metals for the past couple of years,” said Ritter, noting that is a different environment. “It is always a risk when the interest is coming too much from one side of the market.”
Ritter was in Berlin for the 2010 London Bullion Market Association Conference and was interviewed on the sidelines of the conference.
Ritter said that investment surge could change very quickly, but he doesn’t see that happening in coming months. Higher interest rates could be the key, he said.
“That’s not going to happen in the next couple of months and probably not in the next 12 months, Ritter said. Investment will continue to be one of the prime drivers of gold, he said, because there are few places for investors to put their money.
Ritter doesn’t think gold is in a bubble because prices have been moving higher slowly. He also said it looks as if much of the metal that has been bought is in strong hands and is not moving out that quickly because of the economic uncertainty.
On a cautious note, however, Ritter said once investors start to get out of gold, a price decline “could come much faster than the increases we have seen over the past 24 months.”
Heraeus is a global precious metals and technology group with headquarters in firm roots in Hanau, Germany, near Frankfurt. The company is involved in precious metals trading, in materials and technologies, sensors, biomaterials and medical products as well as dental and pharma, quartz glass, and specialty light sources.
Ritter said Heraeus watches prices closely because the company is in a manufacturing business in which precious metals are used. He said at this time industry consumption does not reflect the higher prices of gold.
“On the other hand, investment has become the major theme around the precious metals for the past couple of years,” said Ritter, noting that is a different environment. “It is always a risk when the interest is coming too much from one side of the market.”
Ritter was in Berlin for the 2010 London Bullion Market Association Conference and was interviewed on the sidelines of the conference.
Ritter said that investment surge could change very quickly, but he doesn’t see that happening in coming months. Higher interest rates could be the key, he said.
“That’s not going to happen in the next couple of months and probably not in the next 12 months, Ritter said. Investment will continue to be one of the prime drivers of gold, he said, because there are few places for investors to put their money.
Ritter doesn’t think gold is in a bubble because prices have been moving higher slowly. He also said it looks as if much of the metal that has been bought is in strong hands and is not moving out that quickly because of the economic uncertainty.
On a cautious note, however, Ritter said once investors start to get out of gold, a price decline “could come much faster than the increases we have seen over the past 24 months.”
Heraeus is a global precious metals and technology group with headquarters in firm roots in Hanau, Germany, near Frankfurt. The company is involved in precious metals trading, in materials and technologies, sensors, biomaterials and medical products as well as dental and pharma, quartz glass, and specialty light sources.
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