Gold News

Rate cut 'won't deter gold investment'

A leading figure in the precious metals industry has claimed today (October 8th) that the appeal of buying gold will persist despite recent measures to tackle the financial crisis.

The world's central banks have instigated a coordinated cut in the base rate of interest in an attempt to restore some much-needed confidence to the markets.

However, Simon Weeks, director of precious metals at the Bank of Nova Scotia, has explained that he is one of many who believe that the move will not provide a long-term fix.

He said: "Gold will still continue to gain safe-haven interest. I do not think the cuts will solve the situation. It will help smooth the situation, but I don't think there are any miracle cures at the moment."

It would appear that many investors agree with Mr Weeks' comments, as gold bullion bounced back quickly after the initial fall on the announcement of the rate cut initiative.

There appears to be an overriding belief that it will merely provide a short-term solution which does very little to detract from the benefits of establishing a gold investment.

Jeremy East, global head of metals trading at Standard Chartered, added: "There is a lot of tightness in the market. It may well continue - there is a big demand for physical gold."

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