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Bloomberg reports that gold bullion gained for a second day in London thanks to a weaker dollar. The weaker dollar boosts investment demand in gold bullion as an alternative currency.
There is speculation that the US Federal Reserve will invest more than the $600 billion announced, into debt purchases, which lead to the dollar falling to a three week low against the euro. Gold reached a record high of over $1400 (£900 approximately) on 7th December.
Commentators noted that the dollar weakness is driving the price of gold upwards and talk of further quantitative easing in the US would also benefit gold bullion.
Immediate-delivery gold bullion added 0.9 per cent, to $1,406.45 an ounce (just short of £900) in London this morning.
Bloomberg predicts that gold will average $1,550 in 2011 and other precious metals, platinum and palladium, are predicted to be hot picks in 2011.
Gold has gained 28 per cent in price this year and is heading towards a 10th annual gain. Bloomberg reports that investors are losing confidence in currencies and buy precious metals as a protection of wealth. With uncertainty in the dollar and euro debt, gold bullion is the alternative choice for investors.
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