Gold becomes big investment appeal

A senior employee at Lind-Waldock says that two types of Gold Investment are underpinning the metal's strength at present, the Wall Street Journal reports.

The yellow metal is often bought as a hedge against impending inflation, but is also renowned for its ability to provide a safe haven in times of financial crisis.

Adam Klopfenstein, a senior market strategist at the futures broker, noted that there is considerable confusion over the state of the global economy at present.

As a result, he explained that investors in these two categories are dovetailing to great effect for gold by buying on small dips because of their perceived implications.

He told the news provider: "The first group are those who think the economy is recovering, so they are seeking riskier assets such as gold.

"The second are those who are buying gold for its more traditional role as a safe-haven investment because they believe the rally in equities will collapse."

A similarly optimistic view about the future of Gold Prices was outlined last week by Madhusudan Kela, CIO of Reliance Mutual Fund, which is India's largest mutual fund investment management company.

In an interview with the Financial Express, he noted that the recent purchase of 200 tonnes of gold by the Reserve Bank of India is a sure-fire indication of the metal's investment appeal.

"It is a diversification of assets for the reserve bank and gold is a good source of investment," he told the publication.

"The dollar weakness, especially against the yen and the euro, must have prompted this decision."

Courtesy: www.bullionvault.com