Gold 'the new oil'

Fear regarding the economic markets and poor housing data are encouraging gold prices to rise as investors seek to place their assets into less risky areas than currencies.

According to a US government report published this week, the building of new homes fell to a seven-year low in June, an indicator that the economy is suffering from the credit crunch.

Ron Goodis of Equidex Brokerage - a self-guaranteed introducing broker registered with the National Futures Association - said that gold prices could rise to $1,500 an ounce over the next six months, since it has so far lagged behind oil and copper.

"There's no rush to stocks. A lot of money is going to be coming out of the stock market and gold is the spot to go. Gold could be the new oil," he told Bloomberg.

Meanwhile, Frank McGhee, head dealer at Integrated Brokerage Services in Chicago said that fear over the current economic circumstances has not yet evapourated, which may prove supportive to gold prices.

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