Gold Investment to rise on 'overwhelmingly bearish' dollar
Precious metals analyst Jason Foster has sounded a positive note for Gold Investment today (October 9th) by highlighting weakness in the US dollar, CNNMoney reports.
The yellow metal is favored by investors in times of economic crisis for the inverse relationship it shares with the greenback and it has reached record levels this week.
Gold is also bought as a hedge against inflation and while Mr. Foster, who works for Van Eck Global, highlighted both attractions, he noted that the former is proving particularly crucial.
"Dollar weakness and inflation are the two big drivers. Sentiment towards the dollar is overwhelmingly bearish," he told the news provider.
Those comments were strongly corroborated last week by Dundee Group chief economist Martin Murenbeeld, who has forged a reputation as an expert on gold.
Speaking about the metal at the recent Denver Gold Forum in Colorado, he predicted that prices could average $1,116 per ounce over the course of 2010.
"The US trade deficit with China is unsustainable, the US energy deficit needs corrective action and Asian currencies need to rise," he said, according to MiningMX.
"Gold is too cheap for an official monetary role. Even at levels above $1,000/oz, gold still looks cheap in terms of other financial assets. Mine supply of gold will be flat or headed downwards and future supply growth looks anaemic."
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