Gold News

Rise in Gold Investment 'makes theoretical sense'

A director at Montpelier Group has today (July 10th) outlined a number of reasons why Gold Investment has been growing in popularity over the past couple of years.

In an interview with the Birmingham Post, Trevor Law from the Solihull-based independent financial advisors notes that many market commentators are expecting Gold Prices to hit $2,000 per ounce.

He explained that this view is motivated by a range of factors underpinned by fears over the long-term health of the global economy that all "make theoretical sense".

"It seems that many investors are rushing to the perceived safe haven of gold during the current recession," he told the newspaper.

"Uncertainty over the state of the economy, plummeting share prices, pitiful interest rates and fears over the vulnerability of even the biggest banks have all led investors to return to the old ways of physically holding gold to protect themselves."

Last week, a Bloomberg survey of 31 traders, analysts and investors found that the majority (58 percent) would favour buying gold over selling or remaining neutral about its prospects.

Tom Pawlicki, an analyst at MF Global Inc in Chicago, explained that the results are consistent with ongoing fears about the future of the dollar, which shares an inverse relationship with the yellow metal.

"I've noticed in the past that hedge funds make investment allocations early in new quarters. Given expected dollar weakness, it could create buying of gold," he told the news provider.

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