GFMS has claimed today (September 17th) that increased demand for investment will push gold prices above the $900 per ounce mark this year.

Investors look set to be flocking to buy gold in order to use it as a hedge against inflation as the US financial system creaks following considerable turmoil this week.

Now the major precious metals consultancy explained that it expects the barrier to be broken in the fourth quarter as the dollar slides and the creditworthiness of the US government is called into question.

Chief executive Philip Klapwijk said: "The decline in the (growth) outlook is likely to play out on balance positively (for gold).

"In our mind, once people have time to consider what has happened (in the global financial system) and once we get through an initial wave of liquidation... the consensus will move in favour of gold against the dollar."

Mr Klapwijk's assessment follows similar comments last week from Alexander Davidson, the vice president for exploration and corporate development at Barrick Gold, the world's largest gold producer.

He said: "We still have global inflationary risks and low interest rates, both of which support gold prices."

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