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Wednesday, 24th June 2009 (699 views)

Anything less than a rise in the value of the US dollar will be beneficial for the gold market, it has been claimed.

Speaking to Reuters, analyst at CMC Markets Ashraf Laidi explained that investors will continue to buy the precious metal if the currency does not begin to climb.

"All eyes are on whether the dollar is going to be subject to a fresh selling wave," he told the news source, noting that the only way of this happening is if the US Federal Reserve "gets more vocal" on plans for the next wave of Treasury buying.

Mr Laidi added that "anything short" of this occurring will be "neutral or positive" for the gold sector.

Many investors purchase gold as a hedge against inflation and deflation during times of economic uncertainty and Mr Laidi's comments support those recently made by Emma Plumpton of stockbroker Redmayne-Bentley.

She told the Press and Journal that the continued weakening of the dollar will cause buyers to opt for the precious metal as a means of protecting their funds.

 

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