Investment portfolios could benefit greatly from gold bullion which will act as a valuable diversification tool in today's volatile economic climate.

According to the news source Livemint gold can be used to hedge risk thanks to its weak connection to other major asset classes, many of which are suffering at the moment.

Gold has long been seen as a safe haven during difficult economic times and today it is proving to be no less attractive. Demand from those buying gold is pushing up prices, which in turn are encouraging further gold investment.

"For investment, gold must be considered a valuable tactical asset to add diversity across the risk spectrum," Livemint reports.

One investment company that is looking to meet demand for alternative investments from those seeking diversification is Skandia.

It is launching a new alternative investment fund which will include gold, offering investors "something new and innovative to invest in" according to Skandia Investment chief executive Jamie MacLeod.

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