Gold News

Gold investment may rise as IEA sees oil demand up in 2009

Gold investors received a boost today (December 11th) after the International Energy Agency (IEA) predicted that demand for crude oil will grow next year as output continues to fall.

In a new report, the IEA - which advises 28 nations on energy policy - explained that global demand for oil would increase in 2009 after falling this year for the first time since 1983.

With the Organisation of Petroleum Exporting Countries expected to make a major production cut when it meets next week, the IEA also claimed that it believes output will be slashed outside the 13-country cartel.

Reductions in oil output are positive for anyone with a gold investment as when crude prices rise on lower supply, gold prices tend to move in the same direction.

Meanwhile, top world oil supplier Saudi Arabia confirmed yesterday that it expects to cut supplies by as much as ten percent of contracted volumes in January, compared to a five percent decrease in December.

As Rob Laughlin of MF Global told Reuters: "We knew the bad bits, demand down, but the supply downgrade was supportive."

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