Gold Investment predicted as quantitative easing will 'worry investors'

Gold Investors are likely to set the price of gold rocketing, with Gold Bullion tipped to reach $1,000 an ounce with something to spare.

London-based GFMS has issued a report which raises the possibility of heightened interest in gold bullion investment thanks to growing fears of inflation.

According to GFMS chairman Philip Klapwijk, it is only natural that stimulus packages will have an impact on the rate of inflation and therefore the price of gold.

Governments across the world are resorting to fiscal measures in a bid to halt the global economic malaise, boosting the appeal of gold as a safe haven in times of uncertainty.

"You can't just increase supply of money like that and not expect there to be some consequences in terms of its value against a yardstick such as gold, the supply of which is increasing by about one per cent a year," Mr Klapwijk said in a Bloomberg interview.

"That's going to start to worry investors as much or more than the security of their banks or financial instabilities."

The report also highlights the likely effect of quantitative easing on the dollar.

Should the value of the dollar fall - the expected outcome of a build-up of inflationary pressure in the US economy - Gold Investment will become even more attractive, with the yellow metal traditionally seen as an alternative to the dollar in times of greenback weakness.

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