Gold outlook "very positive"

The long-term prospects for gold bullion continue to look positive, an expert has said.

In an article for Mineweb, Randgold Resources corporate finance manager Victor Matfield suggested that the current market trends helping to keep gold prices high are unlikely to come to an end any time soon.

Comparing the current spate of gold investment fever with the record highs seen in 1980, Mr Matfield remarked that the two situations may seem alike, but are in fact very different.

He explained that the high price levels reached in 1980 were quick to plunge again in the space of five weeks. However, it looks possible that record prices could be sustained for significantly longer at present, he said.

In addition, more investors are now looking to the yellow metal as a safe, long-term investment, while gold supply from mining is declining and demand for gold jewelry remains strong in Asia, Mr Matfield noted.

Gold demand is also strong elsewhere in the world - the Dubai Gold and Jewelry Group has said that sales of the yellow metal were strong in the first week of the Dubai Shopping Festival.

"With no end in sight to the pressures that have pushed the gold price upward, the underlying fundamentals for the price therefore remain very positive," Mr Matfield commented.

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