Buying gold now is ideal as dollar rally 'will fade soon'
A top analyst has explained today (October 28th) that the recent cooling in gold prices is an ideal opportunity for investment, according to a report by Bloomberg.
The yellow metal has been on the slide since breaking the $900 per ounce barrier earlier in the month amidst the collapse and weakness of a number of financial institutions.
In addition, the dollar - which has an inverse relationship with the price of gold - has been rallying for several weeks and was boosted by the $700 billion government injection into the US banking system.
However, it fell today after reaching a two-year high against the euro yesterday, and Greg Canavan from Fat Prophets Management Ltd believes now is the right time to be investing in gold.
He told the news provider: "Gold now looks as cheap as it has been for a long time, and there's no reason why this short-term strength in the US dollar will be sustained.
"We believe the US dollar rally will soon begin to fade, providing a boost to the gold price into the end of the year.''
Mr Canavan is one of a number of industry figures to predict recently that the small downturn in the gold price of late is a prelude to a sustained leap.
One such figure is Leo Larkin, an analyst with Standard and Poor's, who has claimed that buying gold now could offer investors the chance to more than double their return by 2012.
He told the Washington Post: "In three or four years, I don't see why gold couldn't be at $2,000 an ounce."
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