Gold News

Currency woes driving up Gold Prices

Gold Prices continue to consolidate in US dollar terms and heave reached all-time highs in euros, thanks to the difficulties currently facing the European currency.

That is according to David Levenstein, founder of independent South Africa-based precious metals service provider Lakeshore Trading, who wrote on Mineweb that the long-term prospect for Gold Investments is further rises in value.

"Once again we see gold appreciate as the currency devalues," he wrote on the site. "Currency devaluations are a very strong driving force behind gold prices."

Mr Levenstein predicted huge volatility in currencies and financials as investors try to read into the words of political leaders, something that he suggested would impact on commodity prices.

The trader, who has appeared on CNBC and South Africa's Summit TV, added: "If history repeats itself as it always seems to do, then we can expect further trouble with these fiat currencies which bodes well for gold."

Speaking to Reuters, Ole Hansen, senior manager of Saxo Bank, a Danish-based investment bank with 1,000 employees, agreed that investors are Buying Gold as a way of protecting themselves from risk.

However, he said that in the longer term Gold Prices would need to begin rising again if buyers are to avoid "disappointment".

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