Demand for gold is likely to remain high through the current economic troubles afflicting the US.

This is according to Natalie Dempster of the World Gold Council, who wrote on MarketWatch that gold bullion may well see continued strong demand from investors thanks to the falling dollar and rising inflation.

"And if the recession deepens concerns over the health of the US banking sector, demand for gold as a safe haven asset is also likely to remain robust," she said.

Indeed, consultancy GFMS predicted earlier this year that the strength of gold investments seen in the fourth quarter of 2007 is likely to continue throughout 2008.

Ms Dempster went on to explain that a recession will only affect gold investment demand depending on the type of downturn.

"So far, the brewing recession has been positive for gold, as it has been accompanied by a rise in inflation and a falling dollar, which has boosted demand for gold as a dollar and inflation hedge," she concluded.

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