Gold News

Investing in Gold ETFs 'bumping prices'

Gold Bullion prices have been boosted by the number of people investing in the commodity via exchange-traded funds (ETFs).

Adrian Lowcock, senior investment adviser at Bestinvest, said: "There are a lot of people looking at charts, chasing up the price, and a lot of amateur investors in gold because of ETFs giving them access to invest directly in the asset class."

He added: "The amount of ounces of gold being held by ETFs is huge – that gives a bump to the price."

Gold Bullion prices have dipped slightly since peaking earlier in December and Mr Lowcock warned the asset may have "got a little bit ahead of itself" and could drop further before the year is out.

Despite the fall, however, a recent poll by the Association of Investment Companies (AIC) revealed fund managers are optimistic about gold's performance in 2010.

"Interestingly, this year's 'gold rush' is tipped to continue with over a quarter of managers predicting that gold will be the top performing asset," said the group's communications director Annabel Brodie-Smith.

William Rhind, strategic director at ETF Securities USA, told Barrons Online recently that Gold Bullion investors are viewing it as a "long-term strategic asset".

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