An analyst at a major US financial institution has claimed today (February 18th) that Gold Prices could be make a "much larger move" in the future, the Financial Times reports.
Demand for Gold Investment is on the rise, with even countries such as France - not traditional lovers of the yellow metal - becoming net buyers for the first time in 25 years at the end of 2008.
Now Michael Jansen of JP Morgan has explained that the strength of interest in buying gold is so strong that many analysts are expecting prices to take a sharp upturn in the coming months.
He told the newspaper: "There is a very strong case to be made that the current rally in gold is potential pre-positioning ahead of a much larger move at some point in the future."
Mr. Jansen also noted that if, as expected, the demand can be explained by investors' concerns over possible currency debasement or the threat of inflation, then "quite simply, the outlook for gold is stellar".
"This is because the liquidity in the gold market is simply a fraction of the potential demand if the market truly believes that gold is the store of value," he added.
His comments come after Bayram Dincer, a commodity analyst at Dresdner Bank in Zurich, suggested that investors are placing their money in gold as they are concerned over the state of the economy.
"This uncertainty increased risk aversion and continued a flight to a safe haven of gold investments," he told Bloomberg.
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