Gold Investment could be boosted as China expresses dollar fears

People with a Gold Investment were handed a boost on Friday (March 13th) as the Chinese premier expressed concerns over the state of the dollar, the Associated Press reports.

China already holds around $1 trillion in US debt and the US government is hoping it will purchase further bonds to facilitate president Barack Obama's major stimulus package.

However, premier Wen Jiabao took the opportunity to warn the US not to devalue the dollar - which tends to move in the opposite direction to Gold Prices - through irresponsible spending.

Carlos Sanchez, an analyst with New York-based firm CPM Group, explained that such concern over the greenback is one of many reasons why investors are buying into the yellow metal.

He told the news provider: "All in all, what is providing support is uncertainty and volatility in the financial markets, and the continued move to safe-haven assets."

Mr. Sanchez's comments come after BNP Paribas, the largest bank in France, suggested last week that gold prices will average $900 per ounce in 2009, rising to $950 per ounce in 2010.

"The safe-haven appeal of gold is likely to be sustained, driving physical demand higher," it was quoted by Reuters as saying.