The head of a major research company has explained today (September 29th) that the demand for gold investment is set to surge in the next six months.
Congressional leaders in the US yesterday reached an agreement over the $700 billion rescue package designed to support banks and the financial system at large.
However, Paul Walker, chief executive officer of London-based firm GFMS, stated that the deal may not erase concerns about the situation worsening in the future.
During an interview in Kyoto, Japan, he said: "There are still lots of unanswered questions. One thing is certain, that the $700 billion plan is a reflection of how profound the crisis is."
Turning his attentions to gold, he added: "The physical market is extremely strong. Investment demand is driving prices higher. What we have seen over the past couple of weeks is a flight to quality.''
Mr Walker's views were also echoed by Frank Holmes, the chief executive officer of US Global Investors Inc, who pointed out that the rescue plan could weaken the dollar further, thus pushing gold prices higher.
Also speaking in Kyoto at the London Bullion Market Association conference, he said: "This is one of the most bullish factors for gold. This means you're going to have debasement of the currency.''
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