By Thursday last week (21st May) Gold prices has risen to the highest levels seen in two months as a drop in the value of the US dollar fueled investors interest. This is because Gold holds its value through economic downturns better than other investments.

The dollar fell to an eight-week low against the yen after predictions by the U.S. Federal Reserve that the recession will deepen further. The Dollar Index, which is a measure of the dollar against six other major currencies, fell to its lowest point this year. Following the usual pattern, Gold has strengthened as currency values have fallen.

A recent report has highlighted that the demand for gold is soaring among investors, with more investors buying gold. Figures released by the World Gold Council show that total demand for gold, including gold bullion, rose to 1,016 tonnes in the first quarter of 2009 which represents a 38% increase on last years figures.

This is attributed to the commonly held belief that gold is a good investment in troubled economic times.

Conversely, the report showed that demand for gold jewellery from consumers has been falling. Like other non-essential items jewellery has taken a hit because of the recession.

Recent figure indicate that Britain is on a deflationary path but this is expected to be short lived and inflation looks set to return. The Bank of England is raising the amount of money in circulation through a complex process known as “quantitative easing” (QE). Financial experts are predicting that QE will bring about an extremely rapid increase in inflation.

With the inevitability of a period of inflation ahead many investors are asking how they should invest in order to ride out the recession. According to most financial experts there are three investments which will do well in a recession.

Stocks have the potential to appreciate in value greater than the rate of inflation

Gold is not devalued by inflation and remains a true store of wealth

Index Linked Bonds which directly track the current level of inflation

When it launches fully, this site will provide investors with all the information needed to invest in Gold.