A prominent figure at National Australia Bank has suggested that the dollar will fall over the coming months, thus boosting Gold Investment.
The greenback fell by 1.8 percent yesterday (June 24th) against the euro - the most since May 8th - while the US Federal Reserve announced no change in interest rates.
Now Ben Westmore, a minerals and energy economist at the Melbourne-based bank, explained that if the trend continues, investors will look to Buy Gold as a hedge against inflation.
He told Bloomberg: "The more the dollar falls, US consumers will see prices of imports rise and may be prepared to use gold as an inflation hedge."
Those comments come after Sham Gad, managing partner at Gad Partner Funds investment firm, predicted that "another small hiccup [in the financial crisis] could send gold soaring".
He made particular reference to the positions of investors such as John Paulson, who has ploughed a sizeable amount of money into the yellow metal as he believes a spike will eventually arrive.
"In all, Paulson has nearly $4 billion invested in gold," Mr. Gad wrote on Stocks.Investopedia.com.
"That is a huge directional bet on one thing: that the gold price will be much higher years from now. And I don't think he is betting on gold just getting to $1,000 an ounce either."
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