New buyers drive gold markets higher

Gold prices are being boosted still further as the shaky economy brings in more buyers, it has been claimed.

Thanks to media reports, the general public is more aware of world business events and is following analyst advice to invest in commodities, driving gold prices up, according to the Market Oracle.

The market is also attracting bigger buyers, including China, which is now the world's second largest gold consumer as its stock market softens, reports the online magazine.

Michael Widmer, analyst at Lehman Brothers, explained to Reuters that the difficult economic conditions are encouraging gold investors.

"The current macro-economic backdrop, particularly in the US, is bringing new buyers into the gold market," he said. "As long as the dollar remains under pressure, I would expect that gold prices would continue to rise."

As the US Federal Reserve moves to help the ailing economy by cutting interest rates, it is expected that the dollar will continue to fall in value, leading to gold bullion becoming even stronger, according to the Market Oracle.

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