Gold News

Gold 'demand to increase, output to decrease'

The supply and demand fundamentals present in the gold economy currently are likely to heighten.

This is according to analysts at RBC Capital Markets - an investment bank that serves corporations and governments in 160 countries - who told Mineweb that a number of factors would act to support gold prices.

"With the US Federal Reserve rate cycle on hold for the time being, the US dollar drifting and inflation pressures growing around the world, we believe the timing is right for investors to be buying gold and gold equities," the organization commented.

Analysts added that attempts by central banks to support the economy could also keep pressure on currencies, making commodities more attractive.

It was also claimed that demand for buying gold should increase into the fall season, particularly in India and the Far East, while mine supply is likely to remain low, decreasing in 2010.

This view was supported in comments made earlier this month by Michael Darda, chief economist at MKM Partners in Connecticut, who said he believes there will be further economic turmoil over the next six months, which could also act to support gold prices.

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