Outlook for gold expected to be positive

Gold, which has been one of the bigger investment vehicles this year, would remain so as the demand for the metal is underpinned by inflation, economic uncertainty and investors' search for alternative assets, says an official of the World Gold Council.

Addressing a webinar on gold demand trends, Rozanna Wozniak, investment research manager at the WGC, said the recent moves by India and Sri Lanka to acquire gold suggested that central banks were increasingly looking at gold for their diversification of properties.

Presenting an analysis of gold demand-supply dynamics and trends to investors and traders in Q3 of 2009, she said it marked the second consecutive quarter-on-quarter improvement for both jewellery and industrial demand.

And in the case of industrial demand, it was clear that the turning point for demand had been reached. Grant Collins, senior managing director, Dubai Commodity Asset Management, said gold investments were gaining favour in markets where exposure to the metal was limited until now.

Uncertain economic conditions and currency fluctuations had encouraged greater allocation to gold in portfolios.

"We expect demand for gold investment to remain strong with investors looking for simpler and secure means to access the gold market," Collins said.