Dollar's shaky reserve currency status 'positive for Gold Investment'

A well-respected Canadian firm predicted yesterday (September 22nd) that more and more investors will soon begin to realise the value of Investing in Gold.

One of the key factors to consider when buying the yellow metal is the inverse relationship it has traditionally shared with the US dollar.

The greenback is the world's reserve currency at present, but Sprott Asset Management has explained that the effects of the financial crisis mean that it is no longer a viable investment.

"At the end of the day, when the world finally realises what the US has done to the world reserve currency, international investors will shift into an asset that no government can print," it said in a report quoted by Mineweb.

"In our opinion the US dollar's status as a 'port' in the financial storm has officially come to an end."

Meanwhile, UBS Securities Asia - which is a division of Europe's second-largest bank - has also highlighted the plight of the greenback as a major factor in the strength of gold.

Ghee Peh, head of Asian mining research at the firm, explained that the sheer weight of dollar printing by the US government is bound to be a positive for gold bugs in the future.

"The [dollar] rally was due mostly to concerns about financial systems," he told Bloomberg.

"Now, with the US dollar's weakness, gold is going up again. An increase in dollar supplies means more upside risk for gold."

Researching your first Gold Investment today? Don't pay more than you should! Make it cheap, simple & ultra-secure at BullionVault...