Gold News

Austrian bank sounds positive note for Gold Prices

A new report from a major Austrian financial institution has predicted that the future looks bright for anyone with a Gold Investment.

The yellow metal has been kind to investors in recent years, increasing for the eighth year in a row at the end of 2008 and adding about seven percent to its value already in 2009.

Now Erste Bank has claimed in its latest gold report that the current economic climate will lead to a spike in inflation - and that Buying Gold can provide a valuable hedge.

"The strongly expansive policy followed by central banks and the resulting money creation at historic levels - as well as the massive expansion of government debt around the globe - might make inflation literally the problem of the coming years," read one section quoted by Mineweb.

"In conjunction with the almost worldwide zero interest rate policy and the rising criticism regarding the US dollar as a global reserve currency, in our opinion this situation offers a perfect basis for further increases in the gold price."

Those comments were strongly backed up recently by leading precious metals consultancy GFMS, which also highlighted the potential for significant inflation.

Executive chairman Philip Klapwijk explained that he expects gold prices to surpass their all-time high of $1,030 per ounce later this year on the back of growing investor interest.

"Given increasing fears over the long-term inflation threat in western countries, we expect world [gold] investment to see a massive increase this year, particularly from its implied net investment and official coins components," he said.

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