Gold News

Gold Bullion demand speculation expected to entice investment

The number of people Investing in Gold has risen on the back of rumours surrounding an increase in demand for Gold Bullion.

According to Bloomberg, demand for the yellow metal is expected to be boosted by both investors and a rekindling of interest in jewellery.

This view was backed up by a report issued by BNP Paribas SA today (Tuesday, May 19th) which said augmented investor demand had been a "bullish factor for the price over the past months".

What's more, demand for jewellery is said to have recovered recently following a dip in fortunes last year.

"While demand for jewellery declined significantly on the back of record high prices in the first half of 2008, it has since rebounded and has been strong," Bloomberg quotes the report as saying.

Geoff Clear, global co-head of commodities at Australia & New Zealand Banking Group, also expects demand to impact positively on the price of gold.

However, he believes investors will need to take a long-term view if they are to see any gains.

"At this point it appears that the market has plateaued for its appetite on gold," he commented.

"Given that the market is positioned virtually all one way, that is everyone’s waiting for a move higher, I think the actual risk to the market is downward first, somewhere around $850, and then track back higher."

Gold was strengthened recently by weak US housing market data.

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