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Inflation could spark Gold Investment

Buying Gold may become more widespread as the economy starts to recover, it has been suggested.

In a report compiled by BNP Paribas, strategist Andrew Chaveriat said that Gold Investment interest may rise on the back of inflationary fears over the coming months.

Gold is traditionally seen as a safe haven in times of economic uncertainty, and the decision of governments to use quantitative easing to stimulate their national economies has prompted concern that recession could be followed by a period of inflation.

"Longer-term inflation worries will continue to shape demand for gold," Mr. Chaveriat confirmed in the report.

According to Bloomberg, Mr. Chaveriat went on to predict that gold would make a "creeping advance" towards record price highs, marking the yellow metal out as a sound long-term investment.

He noted that chart patterns hint a level above $1,000 could be achieved within the next few months.

Meanwhile, a UBS report indicated a "bullish outlook" for gold with prices moving in a "positive but slowing way", Bloomberg states.

The news follows soon after Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, offered a similar prediction.

"Gold is inching up a bit because of inflation worries, of (governments) printing money, with investors switching to gold," he told Reuters.

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