Gold Investment boosted by inflation fears

Gold has once again underlined its potential as a safe haven in times of economic uncertainty with the news that there is increased Gold Investment demand thanks to concerns over US inflation.

The Daily Telegraph reports that while the relationship between gold and the dollar is usually inverse, this has not been the case for much of the start to the year as investors have seen both as safe bets in the current financial climate.

However, this has changed following fears that economic stimulus packages drawn up by governments across the globe will lead to the build-up of inflationary pressures.

According to Stephen Platt, a commodity analyst at Archer Financial Services in Chicago, this could add to the appeal of gold.

"The dollar is still under some pressure," he told the news provider.

"There's growing concern that the US monetary base is expanding. That's helping foster renewed buying interest in gold."

Meanwhile, David Meger, director of metals trading at Alaron, believes Buying Gold is still a good bet as there is not yet light at the end of the recession tunnel.

"As much as things look better than they have over the past several weeks, that does not mean we're out of this recession yet," he told the Associated Press.

"And based on this premise, there is room for gold in people's portfolios."

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