Wednesday, 7th June 2006 (2660 views)

As concerns over falling currency values and inflationary pressures continue, investors are increasingly turning to gold, according to Goldcorp.

The American mining firm predicts the price of gold will continue to rise steadily, and may break through $800 an ounce.

Commodity prices have risen very strongly until recently, leading some analysts to forecast at least a price correction, if not a more sustained downturn.

Goldcorp's CEO Ian Telfer, however, told a Reuters conference this week that he was optimistic.

"People are looking for something to store value in. They are not just doing it for inflation," the news agency quoted him saying. "It is financially driven."

He further argued that gold securities were becoming more popular, particularly as they do not carry the storage and insurance costs of direct investment.

"[Exchange-traded funds] are getting very little outflow when the price of gold backs off," Mr Telfer added, referring to the recent decline in gold prices.

His comments are supported by predictions from the investment bank Citigroup, which argues that as inflation increases investors will increasing turn to gold to sure up their investment portfolio.

 

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