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Tuesday, 30th June 2009 (1024 views)

Demand for gold has been predicted to rise in the US, following a decision to keep interest rates on hold.

Pradeep Unni, analyst at Richcomm Global Services, told Bloomberg that investors may be prompted to turn to the precious metal as a result of Federal Reserve action.

He explained that "fresh momentum" is likely to be provided after the target lending range stayed at its lowest-ever level of zero to 0.25 per cent.

"[The] Fed's decision to keep interest rates low for an extended period may give enough fundamental support to keep the metal firm," Mr Unni was quoted as saying.

Bloomberg noted that gold's appeal as an alternative investment has been growing, a suggestion echoed by GFMS.

The research and consultancy firm produced a report predicting an increase in demand for the commodity, with gold coins likely to attract investors due to the uncertainties being seen in economies around the world.

 

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