Gold prices should climb on economic woes and high demand

Gold prices look set to be spurred further over the coming months as the economy struggles to recover and demand continues to rise.

Although gold has recently dipped below its high of £1,030 in March as the result of a small resurgence in the dollar, the effects of the global liquidity crisis could deepen further.

An editorial piece in the New York Times today (August 20th) claimed: "Millions of Americans are already suffering.

"And we fear millions more will be hurt before this crisis ends. They cannot wait until after the election for help."

The report indicates that a $4 billion grant needs to be handed out by Congress to states and cities to purchase vacant properties - but that the White House is also resentful of the process.

The dollar will undoubtedly struggle to recover with such undercurrents of turmoil, meaning that gold - which has an inverse relationship with the currency - could increase in value in the medium to long-term.

Furthermore, Afshin Nabavi from Swiss refining group MKS has suggested that investors are looking to buy gold in their droves at present.

"Physical demand is robust. We've not seen this level of demand for some time," he commented.