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Gold prices set for sustained rise 'on inflation fears'

A senior figure at LaSalle Futures has claimed today (December 12th) that people are increasingly investing in gold as concerns about inflation are returning, the Associated Press (AP) reports.

The US dollar has reversed its recent strengthening in the past couple of weeks as investors have looked to move their money into alternative investments.

Now Matt Zeman, head trader at the Chicago-based firm, has explained that with interest rates already low and looking set to decrease further, buying gold is a sound longer-term strategy.

He told the news provider: "In terms of gold, I think that with (interest) rates as low as they are and another cut coming...inflationary fears are starting to come back into investors' minds.

"(Interest) rates are going to have to be kept low. I think a lot of people think the dollar is going to begin to weaken."

Mr. Zeman's comments have been backed up by John March, chief analyst at Superior Gold Group, who is also expecting the greenback to suffer in the coming months.

He expressed his belief that gold prices could be on the verge of a significant upturn moving into 2009.

"I personally think we're going to see more than a small rally (in gold)," he told the AP. "Because I think we're going to see a deterioration of the dollar."

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