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Gold Investment 'to rise' after IMF forecast

Gold Investment could be set to surge after the International Monetary Fund (IMF) today (April 23rd) offered a gloomy economic outlook for the rest of the year.

The IMF predicted that the global economy will contract by 1.3 percent over the course of 2009, in comparison to the 0.5 percent expansion forecasted by the body in January.

Investors tend to Buy Gold as a store of value in tough financial times and Chen Yonglin, an analyst at Citic Securities, explained that its appeal looks set to increase.

He told Bloomberg: "If uncertainties around the global economy persist, gold may trade back above $900. Gold's fortunes will continue to be tied to the equities market."

A similar view was also expressed last week by Koji Suzuki, a senior analyst at SBI futures, who explained that gold should emerge strongly from its current lull.

"Gold is sinking now because of the outflow of funds and technical profit-taking," he told Reuters.

"I think, though, that gold will resume rising after this period of correction is completed."

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