Gold News

Gold Prices to benefit as dollar rally is 'extremely unlikely'

The head of FourWinds Capital suggested today (December 3rd) that market fears over the future of the dollar are boosting Gold Investment, Reuters reports.

Gold tends to share an inverse relationship with the greenback as it is mainly bought and sold in the US currency, which is struggling to cope amid the country's huge fiscal deficit.

Now Kimberly Tara, chief executive of the fund manager, has explained that commodities such as gold are finding favor against this backdrop because they offer a store of wealth.

"There is security in hard assets … the US economy and the dollar are not looking too pretty," she told the news provider.

"It is clear that the ability of the dollar to rally in the near future is extremely limited and that does impact where investors want to put their money."

The central banks of Russia, India, China and Sri Lanka have also been looking to diversify away from the dollar in recent weeks.

Dick Poon, a precious metals manager at Hong Kong-based firm Heraeus, has drawn attention to this trend, suggesting that widespread Gold Buying is now occurring.

"Everybody is bullish on gold and everybody is looking at the signal central banks are sending," he told Reuters.

"It's not just India or China. Most of the central banks, as well as funds, have changed their portfolios to include gold. So, everybody is looking at how much money they will invest in gold."

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