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Gold 'is a barometer of the wider world'

The performance of gold can be seen as an indicator of developments in the wider world, an expert has said.

Speaking at the Prospectors and Developers Association of Canada convention, Jim Steel of HSBC Securities stated that gold is the "barometer of the wider social, economic and political climate", Reuters reports.

The comments came as concerns over the state of the US economy and whether it is falling into recession gather pace.

A number of financial figures have already indicated their belief that the economy is currently in recession, while the likes of GFMS and the World Gold Council have pointed to the economic climate as one of the key drivers likely to influence the price of gold the most over the coming year.

Mr Steel went on to add that commodities - including gold bullion - are reaping dividends from seeing "a great deal of money going into relatively small markets".

And while HSBC expects the dollar to become stronger later this year, gold prices will remain "strong" over the course of 2008, he remarked.

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