Gold News

Gold prices 'may yet benefit from inflation'

Gold investors mulling the words of Federal Reserve chairman Ben Bernanke over possible interest rate rises should consider the wider implications of them before acting on their gold investments, according to one expert.

Lawrence Williams of Mineweb said that while the initial reaction to a potential strengthening of the dollar might be to sell, investors may want to hang on to their gold bullion as it is likely that non-US banks are also considering rate rises.

If this is indeed the case, any positive movement for the dollar could be canceled out by foreign rate rises that are the same as or bigger than any Federal Reserve increase, he explained.

Together with rising geopolitical tensions, tightening mining supply and the possibility of increased gold jewelry buying, there may yet be a case for stronger gold prices in the medium-term, Mr Williams stated.

Indeed, Australia, South Africa and Zimbabwe have all recently released figures pointing to a downward trend in gold mine production, while GFMS revealed earlier this year that worldwide output plummeted to an 11-year low in 2007.

Investing in Gold? For the cheapest, fastest & most secure route to solid Gold Investment simply register for a free, no-obligation account at BullionVault now...


See all articles by Gold Bug here.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn



Market Fundamentals