GFMS: Gold Prices to hit record levels in H2 2009

A leading precious metals consultancy has claimed today (June 26th) that it expects to see Gold Investment increase markedly in the remainder of the year.

In its latest quarterly newsletter, GFMS has predicted that investor concerns over the possibility of inflation - against which gold is a hedge - will encourage substantial purchases of the yellow metal.

Philip Klapwijk, executive chairman of the firm, explained that he expects the interest to be so strong that Gold Prices will surpass their all-time high of $1,030 per ounce in the second half of 2009.

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

Those comments were echoed last week by John Crane, a metals strategist at Deutsche Bank, the largest bank in Germany, who highlighted gold's inverse relationship with the dollar.

He explained in an interview with the Wall Street Journal that if the price of gold drops to the low $900s, investors would be wise to take up long positions in the metal.

"There is some speculation of dollar strength in the short term. But those looking to establish long positions will find the low $900s a fairly attractive level," he said.

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