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Buying gold is a 'general attraction' for the future

The current economic uncertainty is playing an invaluable role in pushing gold prices higher and looks sets to continue doing so into the future.

As the dollar continues to suffer and the financial markets undergo a period of considerable turbulence in the wake of the global liquidity crisis, gold is acting as a hedge against inflation.

Furthermore, if the link between a slowing economy and rising gold prices is as inextricable as it seems, now appears to be a prudent time to buy gold with the financial slump expected to last for some time to come.

Stephen Platt, commodity analyst at Archer Financial Services Ltd, commented: "There's a general attraction to gold, given the uncertainty with other financial instruments.

"Real interest rates are negative and the Fed is walking a fine line between growth and trying to restrain inflation."

People buying gold have been boosted in recent times by a 30 per cent price hike in 2007 and the breaking of the $1,000 per barrel barrier in March this year.


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