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Greater gold investment interest, supply issues expected to lead to higher gold price

The price of gold has been tipped to rise by the chief executive officer of Harmony Gold Mining Company in a Reuters interview, marking it out as an ideal long-term investment.

According to Graham Briggs, there are a number of reasons why gold is likely to increase in value, the most notable of which are supply shortages and gold investment demand.

"All the signals are there that gold has a store of wealth and people are treating it that way," he told the news provider.

"Worldwide production is declining, juniors are unable to explore because of lack of funds, and some ongoing projects are not being funded. On the other hand jewellery demand is likely to be muted, but investment demand will rise substantially."

Mr Briggs believes that the price of gold is likely to reach $900 per ounce in 2009, and HSBC has announced it anticipates more people will buy gold during the economic downturn due to a perception that the yellow metal acts as a safe haven during times of crisis.

Meanwhile, Byron Wien of Pequot Capital Management has suggested that gold could reach $1,200 per ounce before the year is out on the back of a "serious downward slide" on the dollar.

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