Gold News

Gold 'a big-time investment'

Geopolitical tension in Iran and the continuing turmoil in the financial sector are continuing to encourage people to invest in gold bullion.

Analysts report that the use of gold as a hedge against inflation has increased in recent weeks, particularly in response to nuclear weapons testing in the Middle East and the potential collapse of mortgage behemoths Fannie Mae and Freddie Mac.

Ron Goodis, a futures trading director at Equidex Brokerage - an introducing broker registered with the National Futures Association - said that gold is a fear investment.

"Gold is acting as an alternative investment, big time. People are liquidating across all asset classes and they're looking for a place where it's safe. We could see a situation where a lot of commodities go down, but gold takes off," he told Bloomberg.

Meanwhile, Michael Darda, chief economist at MKM Partners in Connecticut, said he believes there will be further economic turmoil over the next six months, which could also act to support gold prices.

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