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Friday, 22nd May 2009 (559 views)

Worries over the present state of the financial markets are prompting investors to turn to gold, an industry expert has stated.

Speaking to Forbes, global commodity strategist at Citigroup Alan Heap said that many buyers are choosing the precious metal due to the fragile situation being seen in economies around the world.

"Surging investor demand is powering the gold market," he told the news source, adding: "The market is expected to remain robust as long as economic and financial risks remain paramount."

Many investors have switched their attention to gold since the onset of the financial crisis, with recent government activity aimed at stimulating economies around the world destabilising currencies such as the US dollar and increasing the precious metal's popularity as a hedge against inflation or deflation.

Earlier this week, Jason Butler of Bloomsbury Financial Planning described such behaviour as "quite rational", explaining that the attractiveness of physical assets increases during a recession.

 

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