Gold News

Now is 'great time' to buy gold

In this morning's New York trade (September 17th) gold investors remained confident, with the precious metal trading only $2 below the 16-month high achieved last Friday.

Those looking to buy gold responded bullishly to the prospect of an interest rate cut at tomorrow's Federal Reserve setting meeting, with a potential weakening of the dollar making gold an attractive prospect.

If the rate is cut by 25 points, as many experts predict, the expected easing of credit could weaken the dollar further in the short term, making it an even better time to buy gold.

Others even predict a cut of 50 basis points in the Fed rate as deepening housing concerns necessitate an influx of credit, with gold investors keeping a close watch on credit availability and subsequent effects on the strength of the dollar.

Analysts saw continued bullishness in the gold market, a trend which Mitsubishi analyst Tom Kendall told Reuters was partly due to safe-haven buying amid current credit and inflation concerns.

He added, however, that the overall outlook for gold was good, as "the other supportive factors are still in place - oil is still very high".

So far this year gold bullion has traded at an average price of $662.43 per ounce, with the last week seeing gold prices stabilise above the $700 mark.

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