Investors should take the 'strategic opportunity' to buy gold

A major US investment company has suggested today (October 24th) that the current economic climate provides a perfect opportunity to buy gold.

In a report on forexhound.com, Merk Investments LLC has described the gold price trends experienced since the start of the credit crisis in August last year as "interesting".

The firm claims that the price should have climbed higher than the £1,030 per ounce peak of March 2008 and that recent falls now provide a good level to enter into a gold investment.

Chief economist Joseph Brusuelas writes: "Given the pervasive uncertainty in markets we think that this represents a strategic buying opportunity on the back of our bullish call for gold to spike towards $1,100 in 2009 with the potential for a much larger move over the longer term."

The company also notes that the Fed has now put around $1 trillion into the economy and that the US government will struggle to operate with deficit below $2 trillion in fiscal year 2009.

Mr. Brusuelas also pointed out the fact that in the long run, the effects of the recent bank bailouts and the slow rate at which supplies of gold are increasing will see it retain its safe-haven qualities.

"Over the longer term the independence of the central banks around the world will be severely tested by governments and publics beset by extraordinary levels of debt and increasing rates of unemployment," he added.

"Moreover, the increase in the supply of gold will fall well short of the increase in the supply of paper money over the next few years."

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