Gold looking strong as markets are 'unconvinced' of recovery
Standard Bank analyst Walter de Wet has claimed today (November 10th) that investing in gold is set to retain its appeal over the coming months as the economic crisis continues.
Governments around the globe have been working furiously to revive the flagging markets, with rescue plans, stimulus packages and coordinated interest rate cuts all being undertaken.
However, Mr. De Wet explained to Reuters that he believes that although substantial money has been pumped into economy, their efforts will prove to be a drop in the ocean - which would probably boost gold prices.
He told the news provider: "While (the cuts) add to the enormous monetary stimulus already in motion globally, markets remain unconvinced that it is enough to save the world from a major economic downturn."
Mr. De Wet's comments follow the last week's assessment of the economy by Dick Poon, manager of the precious metals trading desk at Heraeus Ltd, who said he expects gold investment to rise in the coming months.
He explained that the injection of funds into the financial system may not go far enough and that investors are worried about the US dollar's ability to ride out the storm.
"There's some physical demand from investors in Asia and Europe who are seeking to divert some of their assets into gold as they continue to worry about paper currencies and the banking system in general," he said.
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