Gold Prices rose to a new record high yesterday (November 3rd) as the struggling dollar continued to boost the metal's appeal as an alternative investment.
Speculation is mounting that central banks will continue to Buy Gold after the news that the Bank of India purchased 200 metric tonnes from the International Monetary Fund.
Mike Sander, an investment advisor at Seattle-based firm Sander Capital Advisors, explained that the impact of the economic crisis is increasing the popularity of gold.
"Everything is pointing to the price of gold going higher," he said in a report quoted by Bloomberg.
Mr. Sander also noted that the yellow metal is being boosted by "a whopping budget deficit continuing to balloon, a Federal Reserve in no place of raising rates and central banks all over the world diversifying away from the dollar".
Meanwhile, David Barclay, a Hong-Kong-based commodity strategist at Standard Chartered, has also endorsed the value of investing in gold.
In an interview with Reuters, he noted that any recovery in the greenback in the coming days is likely to be short-lived, with gold enjoying a strong end to 2009.
"I think the negative correlation [between gold and the dollar] will continue," he told the news provider.
"There is the potential for a short period of dollar strength and subsequent consolidation for gold, but this will be temporary as we see the euro/dollar at $1.55 by year-end."
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