BV: Gold Investment advocated on back of potential dollar weakness - Tuesday 11th August 2009
Expectations of future dollar weakness mean a prominent investor believes it is a good time to Buy Gold.
In an interview with Bloomberg, Steve Leuthold said he may increase his Gold Investment by as much as five times in response to dollar market predictions.
Mr. Leuthold, whose Leuthold Core Investment Fund has outperformed 95 percent of its rivals over the last five years, currently has two percent of his holdings in the yellow metal but suggested this may have risen to ten percent by the end of March next year.
This is on the back of concerns that the US government will have trouble keeping the money supply in check, potentially leading to inflation and further dollar weakness.
Should this scenario play out, Gold Investment would be favored as a way of protecting assets in economically uncertain times.
"We have begun to build a defensive position in gold," Mr Leuthold told the news provider.
"You could see a very significant decline in the dollar that might serve to get our politicians back on the right track to fiscal responsibility."
Meanwhile, Gavin Wendt, a senior resources analyst at Fat Prophets Funds Management, said the battle between the US dollar and gold was set to continue.
"This is a tug of war between gold prices and the US dollar," he said in a Bloomberg interview.
Gold's appeal as an alternative investment has been widened on the back of US employment data which shows the economic decline has yet to be decisively reversed.
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