Gold News

Bernanke's inflation comments 'could boost Gold Investment'

Gold Investment could be on the rise after US Federal Reserve chairman Ben Bernanke hinted that inflation may return with a vengeance.

In an article published by the Wall Street Journal, Mr. Bernanke noted that the central bank will have to "tighten monetary policy" if rising consumer prices are to be avoided.

However, investors tend to Buy Gold for its ability to provide a hedge in periods of inflation and one analyst offered a positive outlook for the yellow metal today (July 21st).

Hwang Il Doo, a Seoul-based commodities broker with KEB Futures, told Bloomberg: "An improving economic outlook is leading investors to the risk of inflation, which will become more pronounced over time, bolstering demand for gold."

Those comments were strongly backed up last week in a new report from the World Gold Council, written by North American investment head Natalie Dempster and investment research manager Juan Carlos Artigas.

The authors from the marketing organization noted that gold offers better protection in an inflationary environment than real estate, inflation-linked bonds and other commodities.

"If inflation does materialize, then traditional inflation hedges like gold, commodities, real estate and inflation-linked bonds are likely to outperform other mainstream financial assets," they were quoted as writing by the Wall Street Journal.

"Gold not only performed best in terms of real returns during high inflation years, it also delivered a better risk/return profile."

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