Gold Investment on dollar weakness 'still occurring'

SBI Futures senior analyst Koji Suzuki revealed today (June 9th) that his company is seeing plenty of Gold Investment on worries over the dollar, Reuters reports.

Gold Bullion flirted with the $1,000 per ounce barrier last week as investors bought up the metal as a hedge against potential inflation and a falling greenback.

Mr. Suzuki conceded that its subsequent drop to $950 per ounce has been motivated by a mini-recovery in the dollar but noted that gold buying is still favored from a longer-term view.

He told the news provider: "We find regular investors buying gold as a hedge when the dollar weakens."

Although gold did manage to move into four-figure territory in February, some market observers have questioned its ability to overcome resistance at that level and move higher.

However, prominent gold columnist Lawrence Williams explained last week that the metal is building up to a prolonged period above the $1,000 per ounce mark, perhaps later this year.

"Gold is still likely to test $1,000 again if only as an inflation hedge with a strong backing as a continuing insurance policy in an uncertain marketplace, and eventually stay there," he wrote on Mineweb.

"It may take two or three instances to break through decisively, but this is more than likely to happen in our view some time this year."

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