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Gold Prices are 'sailing with the wind behind them'

Edison Investment Research analyst Charles Gibson has predicted that Gold Prices could average above $1,000 in the next 21 years.

Mr. Gibson substantiated his view by citing central governments' response to the economic crisis, noting that a prolonged period of inflation could ensue.

In a recent report, he compared the situation to a similarly difficult financial time in the 1970s, when a second surge in inflation late in the decade pushed Gold Prices from $35 per ounce to $850 per ounce in 1980.

He told Fund Strategy: "History suggests they [the governments] will probably overdo it. Gold is sailing and the wind is behind it."

Mr. Gibson also predicted that negative real interest rates in the US will continue, thus affecting bullion banks' ability to lease gold from their central counterparts and squeezing supply though producer hedging.

His comments come after Adrian Lowcock, senior investment advisor at Bestinvest, explained that gold continues to offer huge appeal as a long-term investment.

"Gold is a natural hedge against inflation and currency volatility," he told the Independent.

"This means the price of gold will rise to compensate for a rise in inflation and currency prices."

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