Demand for investing in gold is 'still strong'
A senior precious metals trader has claimed on Saturday (December 13th) that demand for investing in gold is still being sustained in the current financial climate, Bloomberg reports.
Some analysts have expressed a negative view of gold in the past few months as the dollar - which gold prices tend to oppose - has strengthened noticeably.
However, Dick Poon, manager of precious metals trading at Heraeus, has explained that the resurgence appears to be over and investors are buying gold for its alternative investment qualities.
"Investor demand for gold remained strong as people are still trying to diversify," he told the news provider.
"The dollar may suffer further as investors price in an interest rate cut by the Federal Reserve of another 50 basis points.''
The concept of an interest rate cut being beneficial for gold prices has been echoed by Walter de Wet, a Johannesburg-based analyst at Standard Bank, the largest bank in South Africa.
"Should the Fed cut by 75 basis points tomorrow, it would leave U.S. interest rates at only 25 basis points, this would be bearish for the dollar," he said, in a report quoted by Bloomberg.
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