Dollar movements to be 'positive or neutral' for Gold Investment
CMC Markets analyst Ashraf Laidi claimed today (June 23rd) that anyone with a Gold Investment will be buoyed if the US dollar does not rise in the coming months.
Market commentators are currently mulling over a wide range of economic data to decide whether the 'green shoots' of recovery have been highlighted prematurely.
Investors tend to Buy Gold as a store of wealth or as an alternative investment to the dollar and Mr. Laidi has explained that they will be hoping for some declines in the greenback.
"All eyes are on whether the dollar is going to be subject to a fresh selling wave," he told Reuters.
"The only source I see for that would be if the Fed gets more vocal in communicating on the next batch of Treasury buying. Anything short of that will remain neutral or positive for gold."
Mr. Laidi's views come after Ashish Advani, editor of Exotic FX Alert, claimed last week that gold prices should hit at least $1,200 per ounce by the end of the year.
He highlighted three key reasons for being so optimistic, namely that ten-year yields on US Treasuries will keep rising, the Fed will continue to print more money and the Treasury will issue more debt in response to the financial crisis.
"The trilogy of causes will ensure that hold prices will continue their upward ascent at a fairly rapid pace in the next few months and years," he wrote on WorldCurrencyWatch.com.
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