Buffett's bleak economic outlook provides boost for gold investing

Billionaire investor and prominent voice for fiscal responsibility Warren Buffett has claimed today (August 22nd) that he does not see the US economy improving before 2009.

The statement could see a surge of gold buying, as gold tends to have an inverse relationship with the dollar, which would undoubtedly weaken if Mr. Buffett's prediction is correct.

Mr. Buffett, who has been named as the world's richest person by Forbes magazine, also explained that Fed chairman Ben Bernanke "does not have any magic wand" to counter rising inflation - another boost for anyone contemplating investing in gold.

Address the global liquidity crisis, Mr. Buffett commented: "Right now the situation is still getting worse, and I would say that I don't see any early end to that."

Mr. Buffett's views also appear to be shared by some gold price experts, with Scotia, the global corporate and investment bank representative , recently increasing its ten-year average price forecast by 13.6 per cent to $844 per ounce from $742 per ounce.