Gold 'has proved its qualities' as a long-term investment

A leading Australian research firm claimed on Friday (November 28th) that gold's resilience and value as a long-term investment has been crystallized in recent months.

Since peaking at a record high of $1,030 per ounce in March, a number of factors which are normally bearish for gold have been occurring in the markets and the global economy.

The US dollar has appreciated, inflationary expectations have subsided, oil and other commodity prices have tumbled and there has been a wave of aggressive hedge fund selling.

However, exploration and mining equity research firm Resource Capital Research (RCR) has explained that the fact that gold prices have not tailed off dramatically proves its ongoing appeal as an investment.

In a December quarter survey, the Sydney-based organization stated: "The near-term outlook for the gold price remains closely tied to investment demand from safe-haven buying, which has underpinned the price in recent months and is looking increasingly strong.

"There is additional upside for a major gold price breakout should the US dollar lose its current safe-haven currency status, through a further decline in the US economic outlook relative to other world economies in 2009."

The outlook expressed by RCR was echoed recently by Carlos Sanchez, a New York-based analyst at commodities research and asset management firm CPM Group.

"The sentiment is still there that actually gold is a solid investment, and has more of a price appreciation potential than other investments," he explained.

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