Gold News

Long economic battle 'will complement gold investment'

Jeffrey Nichols, the managing director of American Precious Metals Advisors, has claimed that he is still bullish on gold as a long-term investment.

Gold prices have fluctuated considerably over the past few weeks as confidence in financial institutions plummeted, only nervously returning now after several major corporations were bailed out.

However, the Hindu Business Line has reported Mr. Nichols as claiming that the effects of the impending global recession will be far-reaching - which would boost the appeal of gold.

"I am bullish on gold because, in the end, as the global economic recession deepens, governments will find that the only way out of this mess - the only way to pay for all the private debt accumulating - is to print more money. In other words, to inflate," he told the news provider.

"It is no longer just 'gold bugs' buying the yellow metal but regular investors and savers - from billionaires to the middle class - rushing for safe haven."

The view that gold investment is a prudent long-term tactic has been supported by Jayant Manglik, the head of commodity business at Religare Commodities Ltd.

The news provider quotes him as suggesting that gold prices will continue a steady upward trend in the coming months, possibly hitting $1,000 per ounce if the economic turmoil continues.

"Gold can hit $1,000 sooner than thought as more banks and financial institutions in the US and other OECD countries are expected to collapse, aggravating the situation sufficiently to push gold above $1,000," he said.

"The impending weakness of the dollar against a basket of major currencies is also expected to give a fillip to gold prices."

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