Monday, 5th June 2006 (9563 views)

Analysts are expecting an upturn in the price of gold this week as a result of further decline in the value of the dollar.

While a lower priced dollar can look like an attractive alternative to precious metals, it is also likely to push analysts away from US stocks and bonds.

A survey of analysts by the Bloomberg news agency found the vast majority advised buying gold.

Of 41 experts canvassed only five recommended selling, while eight said to hold.

"Investors are going to start realizing the US is on a deliberate campaign to debase the dollar," Peter Schiff, chief executive of brokerage firm Euro Pacific Capital, told the news agency. "When the dollar comes under a lot of pressure, there's a very strong case for owning gold."

The Federal Reserve is expected to continue its policy of raising the interest rate this year as high energy prices continue to put inflationary pressure on the US economy.

Higher interest rates are likely to the see the dollar continue to fall against other major currencies like the euro, sterling and the Japanese yen.

Gold was trading at $642 per ounce on Friday, down from $720 per ounce last month.

 

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