Inflationary outlook could boost gold price

With central banks around the world pumping money into their economies, investors could once again turn to gold as a 'portfolio optimiser'

Dollar demand for gold hit an all time record in the third quarter of the year as investors sought refuge from the global meltdown. The commodity's historical status as a safe haven has come to the fore again with demand up by 45% on the previous quarter to reach US$32bn. Investment demand was the biggest contributor, up by US$10.7bn to 382 tonnes, double earlier levels, according to a report from the World Gold Council. However, the price of gold has fallen to around the current US$800 per ounce since its peak of over US$1000 in March, but the price response is not surprising. The...