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Wednesday, 13th May 2009 (1053 views)

Gold demand continues to remain strong as a result of falls in the value of the US dollar.

The weaker currency has increased the appeal of the precious metal and pushed up values as investors seek a "hedge against economic uncertainty", according to Reuters.

Frank McGhee, head precious metals trader at Integrated Brokerage Services, predicted that gold will "reassert itself" as a currency and "react to changes in the value of the dollar".

During periods of economic uncertainty, gold is often viewed by investors as a 'safe haven' asset.

Meanwhile, the Associated Press reported that analysts have been "more upbeat" over the past few weeks about the potential for economic recovery, which could fuel inflationary pressures and boost gold markets in the long run.

Mangesh Gavankar, sales and marketing head for Emirates Gold at the Dubai Multi Commodities Centre, recently told Emirates Business 24/7 that the precious metal is "100 per cent safe" and has historically been a secure form of investment.

 

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