Gold News

Buying Gold is 'one of the best hedges' against dollar weakness

A senior figure at ETF Securities has today (August 17th) highlighted the ability of the Gold Price to provide a hedge against a weakening dollar, Investors Chronicle reports.

The pair traditionally share an inverse relationship and already this year, the trade-weighted greenback index has fallen by five percent, while the yellow metal has risen by nine percent.

Now Nicholas Brooks, head of research and investment strategy at the UK-based firm, has explained that the strong ties between the two are one of the main reasons why Gold Investment is so popular.

He told the news provider: "Generally the gold price tends to rise more than the dollar weakens, which is why it really is one of the best hedges against dollar weakness."

Another major factor affecting gold is the mining industry, as a reduction in supply will inevitably see demand increase and therefore tend to push the price higher.

Last week, Sino Gold Mining, the majority owner of the White Mountain mine in China's Jilin province, revealed that gold production had been halted due to a dispute with farmers.

"Sino Gold is working with the relevant authorities to resolve the situation and is optimistic that full gold production will resume shortly," the company stated.

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