Domestic gold prices hit record high as international markets soar

• Source: Global Times
• [05:20 November 19 2009]
• Comments

The US Federal Reserve chairman Ben Bernanke reiterated Monday that the US interest rates are very likely to be kept at record-low levels to shore up the economic recov-ery.

Rising inflationary expectations and market doubts about sustainable economic recovery made gold investment a high priority as gold is believed to be capable of withstanding inflation and other risks, said Tao Xingyi, president and chief investment officer of Guangzhou-based Jinding Gold Investment.

Domestic investors have become more interested in gold since prices started rising a few years ago, Wang said. But he warned the surging gold prices are partly driven by speculation that is likely to lead to small fluctuations in the market in the near future.

There will be a market correction and then the price is likely to slowly inch up, added Wang.

Jinding's Tao, however, was more optimistic, saying that gold prices will continue on their upward trend for the rest of the year, and he estimated they would reach a new high of between $1,300 and $1,400 per ounce by early next year.

It is not a good time to buy a large amount of gold at the moment, given the already record-high prices, said Wang.

Investors should wait until the price falls to a relatively low level, said Tao.

Both Wang and Tao stated that the middle- to long-term investment in real gold and paper gold is much safer for average investors while short-term gold futures and stocks investment have high risks particularly during periods of crisis.