Gold News

Positive oil price outlook could prompt Gold Investment

Gold Investment could be boosted after Mike Fitzpatrick from broker MF Global predicted a bright future for oil prices, the Guardian reported yesterday (August 24th).

The yellow metal is renowned for its inverse relationship with the US dollar, but it is also viewed as an inflation hedge and, as such, often moves in the same direction as crude.

Now Mr. Fitzpatrick has explained that a number of significant economic factors are helping oil's recent ascent above $70 per barrel and look set to continue in the future.

"Oil continues to ride a wave that is propelled by a fear of rising inflation and currency devaluation, Opec members' unusually high level of compliance with production constraints and a high level of oil importation into China," he told the newspaper.

Meanwhile, the World Gold Council (WGC) - which is a marketing organization funded by the world's leading gold companies - also had some positive news for anyone with a Gold Investment last week.

Rozanna Wozniak, investment research manager at the WGC, revealed that the yellow metal is finding favor in the Middle East, mainly due to its strong performance during the global financial crisis.

"We are starting to notice a trend whereby the volume of gold investments in rising in the Middle East and with time we believe it will balance out with retail demand," she told Reuters.

"Unlike other commodities, gold had managed to hold its value during these difficult financial times and returns on investment were also positive."

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