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Monday, 2nd March 2009 (1452 views)

The market for gold "remains robust" following a small dip in prices and could well rise to challenge a record $1,030 (£731) per ounce reached last year, an analyst has predicted.

Although gold prices have dropped back slightly from more than $1,000 an ounce, an article in the Financial Times predicts that they will climb further over the coming months, as retail demand remains strong.

A fall in the total global output of gold last year by nearly four per cent to 2,385 tonnes could fuel prices further, according to an expert.

Mark O'Byrne, a director at Gold and Silver Investments, told the newspaper: "Demand is set to remain strong for the foreseeable future while supply remains tight, especially as central banks are increasingly reluctant to sell their gold reserves."

Mints around the world are "struggling" to meet rapidly growing demand for gold bullion coins, raising premiums and causing shortages, the paper reported.

A recent report in the Financial Times suggested that rising demand is creating a shortage of gold coins as investors attempt to safeguard their money in the wake of the global economic slowdown.

 

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