Gold 'building on gains'

Technical analysts are remaining bullish on the future of gold prices, thanks to the prevailing economic difficulties.

Crude oil prices and the omnipresent threat of rapid inflation were cited as factors contributing to the current rise in prices, since gold bullion is often used as a hedge against inflation, going hand-in-hand with oil.

Darren Heathcote of Investec Australia, one of the country's largest financial services providers, said the factors acting to support the gold price are "hanging around".

"Obviously oil has been forever there and remains a concern to many worrying about the effects on inflation. For the time being, I suspect, gold will remain relatively strong.

"Whether it would break higher through the $950s is yet to be seen. But I suspect there could be potential for it," he said, according to Reuters.

The $900 to $950 an ounce mark is viewed as the next barrier for gold to break through if it is to test the record levels seen in March 2008.

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