Price of Gold in £

Price of Gold
Price of Gold

The global recession has seen good news for those investing in gold.

Gold makes a good investment during times of economic uncertainty. Gold has become more attractive because

Weakness of US Dollar. Growing budget deficits, deep recession and bank bailouts have all made the dollar less attractive. Signs that the Chinese are seeking to diversify away from the dollar are a signal of the changing fortunes of the global reserve currency.

The policy of quantitative easing has helped cause the threat of inflationary pressures in the economy. This uncertainty and fear of potential inflation has made gold look more attractive.

In a recession demand for gold falls, e.g. demand from India has moderated. But, this fall in demand has so far been outweighed by the financial insecurity and demand for alternatives to more common types of investment.

See: Investing in Gold during a recession

By on June 24th, 2009

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