Gold at $1600 / oz?

Gold prices could reach US$1,600 an ounce by the end of next year, AngloGold Ashanti (AGA), the world's third-largest producer, has told Reuters.

'We think the direction for gold looks like it could continue to be quite strong on the upside,' said at the Reuters Global Mining and Steel Summit.

'You could say we should breach US$1,500 next year and we use (an increase of) about US$100 an ounce a year on the supply side to give a sense of where the market goes over the long term,' he said.

'Basically I'm saying towards the end of next year, we should hit US$1,600 based on those numbers.'

The metal hit a record high of US$1,440.40 an ounce on March 7, supported by its status as a safe haven from risk and inflation as unrest in the Middle East has spurred oil prices higher. Japan's nuclear crisis has also supported prices.

The metal held steady last Thursday, March 17, as it drew support from the spreading turmoil in the Middle East and talk of extended loose U.S. monetary policy after lackluster home sales data.

Continued fighting in Libya, where western forces have failed to dislodge Muammar Gaddafi's armour, calls for the ouster of Yemen's president and Palestinian rocket strikes on Israel that have heightened geo-political uncertainties in the region.

'Gold is expected to remain firm, as there is a lot of geopolitical uncertainty and money printing going on,' said a Singapore-based trader, referring to the looser monetary policy adopted by Japan's central bank after the earthquake hit nearly two weeks ago.

'But there is strong resistance at US$1,440/US$1,445 level, so we'd need a good headline to break through,' he added.