Gold Investment becoming 'an industry benchmark'

ETF Securities analyst Daniel Willis suggested yesterday (May 25th) that Gold Investment has come into its own since the start of the credit crisis.

A recent report published by leading precious metals consultancy GFMS revealed that net flow of funds into all types of Gold Investment surged by 80 percent last year to a record $26 billion.

The shift to buying physical gold largely occurred in September 2008 after the collapse of Lehman Brothers and Mr. Willis believes that the yellow metal's popularity will continue to grow.

"The crisis has highlighted the importance of robust, reliable investment vehicles from a liquidity and credit risk perspective," he told Fund Strategy.

"Full collateralization (and in the case of gold, physical backing of allocated bullion) and the use of multiple market-makers are fast becoming the industry benchmark."

Gold Prices have been edging up recently after falling back from the highs reached on February 20th and Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, expects this trend to continue.

"Gold is inching up a bit because of inflation worries, of (governments) printing money, with investors switching to gold," he told Reuters.

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