Gold Price surge possible 'if investors allocate more'

A prominent fund manager claimed today (May 27th) that Gold Prices could easily embark on a sustained rise if more investors realised the metal's allure, the Daily Telegraph reports.

Daniel Sacks, manager of the £50 million Investec Global Fund, conceded that professional investors only have a small part of their portfolios dedicated to the yellow metal.

However, he noted that Gold Investment is still proving popular and that only a "minority" of investors would need to put more money into gold for it to have a "significant price impact".

He told the newspaper: "Gold appears to be benefiting both from being the traditional hedge for inflation hawks, some of whom are now beginning to worry about the risk of hyperinflation, and from the mistrust of some investors towards cash assets and government obligations."

Mr. Sacks' comments were backed up last week by Paul Learton, chief investment strategist at independent firm OmniSans Research, who gave an even more bullish perspective.

He predicted significant price rises after drawing parallels between gold's current bull run and the previous one, which started in the 1970s and culminated in 1980.

"If this bull market parallels the last one, then gold should renew its upward momentum in a very serious way starting in October 2009," he wrote on SeekingAlpha.com.

"And this next leg-up should be a major one (the biggest gains came during the second rally in gold's bull market in the '70s). However, judging from the Fed's money printing, the next leg-up may come even earlier."

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