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Gold shares 'have more upside'

Johannesburg - While the gold price has an anticipated upside of 5% to 10%, the upside for gold equities is much higher, Investec Asset Management said on Wednesday.

Head of global commodities and resources Bradley George told those listening in on a commodities conference call that Investec Asset Management was investing in gold companies provided their costs remained stable.

He said the asset managers preferred companies with strong balance sheets and growing production profiles.

"Both in an inflationary and deflationary environment, we are bullish on gold," said George.

He said as a currency, gold was the only currency where production was on the decline.

Production is declining across the world, particularly in South Africa and while China and Russia are the two bright spots in this declining profile, George said China was unlikely to selling its gold into the market.

Gold rallied to a fresh all-time record high of US$1 070.40 an ounce, on a London PM fix of US$1 059.50, in mid-October.

- I-Net Bridge

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