Gold News

Gold investment 'could prove wise' if inflation returns

Andrew Barker from Skipton Financial Services has claimed today (April 3rd) that Investing in Gold could prove to be a sound strategy in the coming months, the Daily Telegraph reports.

People generally buy the yellow metal as it provides an alternative investment to paper currencies and in particular the dollar, which tends to move in the opposite direction to Gold Prices.

Now Mr. Barker has explained that inflation - which investors sometimes hedge against through gold investment - could be set to return as governments attempt to tackle the financial crisis.

He told the newspaper: "Gold may well prove to be a wise investment if government measures to stimulate the economy, such as quantitative easing, backfire and result in inflation."

His comments come after it was revealed earlier this week that the European Central Bank has sold off 35.5 tonnes of gold as part of a deal agreed between central banks in 2004.

At present it is unclear how money from the sales - which could be worth in the region of $1.15 billion - will be used, AFP reported on Wednesday.

However, some analysts have suggested that it may be handed to the International Monetary Fund in order to provide assistance to countries suffering from the economic downturn.

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