Gold prices could hit $700/oz by end '07 - GFMS

MUMBAI (Reuters) - Gold could rise to $700 an ounce by the end of 2007 by regaining its safe-haven appeal and decoupling from recent financial market volatility that has swept key metals lower, consultancy GFMS said on Friday.
Gold has traditionally been used by investors as protection against economic and political uncertainty. But in recent months it has behaved much like other financial assets because of the growing role of commodities in diversified portfolios.
Bullion had hit a seven-week low last week as investors sold the precious metal for cash to cover margin calls on losses arising from a meltdown in the U.S. subprime mortgage market.
Paul Walker, chief executive officer of London-based GFMS said this trend was poised to change.
"My view is that the ground work is in place for a substantial rally in gold," Walker told Reuters on the sidelines of a conference in Mumbai.
"Gold will start to decouple and trade on its own," he added.
Spot gold hit a one-week high of $668.90 an ounce on Friday, up from its previous close of $659.20 in New York. The metal had surged to a 26-year high of $730 last year.
On gold imports into India, the world's largest consumer of the metal, Walker said the number was likely to rise to 810 tonnes in 2007, with imports of 140 tonnes seen in both the third and fourth quarters, if prices stayed between $635-$675