The gold price
'Decade of dollar weakness' to boost Gold Investment - Tuesday 9th June 2009
A prominent fund manager has claimed that gold is a sound long-term investment because the dollar is likely to struggle in the next decade, Reuters reports.
Investors often opt to Buy Gold as an alternative currency to the greenback - particularly when inflation is on the horizon - as the two have historically shared an inverse relationship.
Now Axel Merk, who manages the California-based Merk Hard and Asian Currency Funds, has explained that Gold Investment is likely to be rewarded as a result of an extended period of dollar devaluation.
He told the news provider: "If I look at ten years from now, I do believe that the purchasing power of the dollar is going to be substantially less.
"Gold is ... the simplest way to play the devaluation of the dollar and potential inflation."
Those comments were strongly echoed recently by Commodity Warrants Australia analyst Toby Hassall, who explained that the connection between gold and the dollar has strengthened in recent times.
As a result, he continued, gold could eventually push past its all-time high of $1,030 per ounce, reached in March 2008.
"Given the re-emergence of the typical inverse relationship between the dollar and gold, the likelihood of further weakness in the dollar should drive gold to a test of its 2008 record highs," he said in an interview with Bloomberg.
Looking to Buy Gold today? For direct access to live Gold Market prices – and to save up to 80% compared with coin dealers' fees – click through to BullionVault now...
Investors often opt to Buy Gold as an alternative currency to the greenback - particularly when inflation is on the horizon - as the two have historically shared an inverse relationship.
Now Axel Merk, who manages the California-based Merk Hard and Asian Currency Funds, has explained that Gold Investment is likely to be rewarded as a result of an extended period of dollar devaluation.
He told the news provider: "If I look at ten years from now, I do believe that the purchasing power of the dollar is going to be substantially less.
"Gold is ... the simplest way to play the devaluation of the dollar and potential inflation."
Those comments were strongly echoed recently by Commodity Warrants Australia analyst Toby Hassall, who explained that the connection between gold and the dollar has strengthened in recent times.
As a result, he continued, gold could eventually push past its all-time high of $1,030 per ounce, reached in March 2008.
"Given the re-emergence of the typical inverse relationship between the dollar and gold, the likelihood of further weakness in the dollar should drive gold to a test of its 2008 record highs," he said in an interview with Bloomberg.
Looking to Buy Gold today? For direct access to live Gold Market prices – and to save up to 80% compared with coin dealers' fees – click through to BullionVault now...
Goldbug, 09 Jun '09
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