Demand for gold investment 'is rising'

A senior figure at Mitsubishi Corporation Futures and Securities has claimed today (January 27th) that the current financial climate is driving an increase in gold investment, Bloomberg reports.

The latest gloomy news for the banking sector arrived in the shape of BNP Paribas and ING Groep HV posting losses, while Caterpillar and Sprint Nexel announced major job cuts.

Now Shuji Sugata, a research manager at Mitsubishi, has explained that the growing feeling of unease about the future of such companies is pushing investors to seek solace in gold.

He told the news provider: "Concerns about widening losses in financial institutions enhanced the value of gold as a safe haven. Investment demand for gold is rising."

Those views were echoed last week by Eugen Weinberg, an analyst at Commerzbank, the second-largest bank in Germany.

He explained that people are looking to buy gold as a "real hedge against everything" as other commodities continue to flounder.

"The more problems we see in the banking sector and the financial sector in general, the more attractive gold as a hedge against such risk will be," he told Reuters.

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