Data suggests that the gold price has dipped slightly recently because of a small reduction in the value of the euro, however the price has been supported by prudent investors taking advantage of the fall by buying gold. It’s the support of investors which prevented the gold price from falling even lower as the dollar strengthens.

Analyst’s report that gold prices have fallen by 4% over the last fortnight as the dollar rallied again the euro.

So, with forecasters generally predicting that there will be a continued upward trend in the price of gold during 2010 this could be a very good time to buy gold.

Demand for gold from investors has pushed the price of gold higher for nine years running according to an industry report published on Thursday.

The World Gold Council, who is a mining marketing group, reported that last year the price of gold rose for the ninth consecutive year reaching $1,087.50 an ounce by the end of December. Fuelled by investors who buy gold as a hedge against inflation, the price of gold has increased 25% during 2009.

The report concluded that an important reason for this increase in demand was that gold is a reliable investment and the price outlook seems positive with forecasters pointing to a continued rise. They suggested that investors are taking a long-term view when it comes to buying gold.

Recent research suggests that China overtook India in 2009 as the world’s top consumer of privately owned gold. This trend has been forecast to continue long into next year.

Yesterday gold recovered from its biggest fall in three weeks as demand for the commodity as a safe haven from the weaker dollar prevailed.

However, bullion futures slid 1.9% yesterday which represents the biggest drop since 17th December. This was caused by China insisting on a reduction in bank lending which is likely to curb demand for raw materials. China is such a big player now that any shift in policy or trend by them has a massive impact.

The U.S. Dollar Index fell by 0.5% today which represents a one month low. This is significant for those with investment in gold because the dollar and gold usually move inversely. In other words, as the dollar weakens the price of gold will rise.

Forecasters expect a general rise in the price of gold in 2010 as investors continue to buy gold in order to diversify their assets moving away from currencies because of continued concerns about inflation.

India, until recently, has been the largest bullion consumer internationally (the largest is now China). According to recent reports, the Bombay Bullion Association (BBA) increased its estimate of the total imports of gold in 2009 from 300 tonnes to 350 tonnnes. Their previous forecast predicted that the nation would import 200 tonnes in that year.

December saw particularly high imports of gold by India. Figures suggest that the country imported 33.5 tonnes during December which represents an increase on the previous year when 30 tonnes were imported.

In November the Indian central bank, shifted its policy to buy gold, when it purchased nearly $7 billion from the International Monetary Fund.

The markets have shown an increase in the price of gold for the fourth day in a row as we enter the New Year. The price rise is attributed to doubts about the likelihood of an economic recovery this year. Investors tend to buy gold at times of high inflation or recession as it’s seen as a solid investment which holds its value better than paper currency.

Forecasts suggest that gold’s appeal could carry on well into 2010. The recent four day long price rise came after a small decline in December after an extremely good year for gold. 2009 is being dubbed as "The Golden Year". The rise came alongside a struggling dollar which dropped in value during the same four day period.