Gold: Long-term outlook bullish, may deliver moderate gains

As we step into 2011, the key issue on the top of an investor’s mind would be the investment avenue that will provide high returns in an uncertain global economic scenario. Since, uncertainty continues to prevail, looking at bullion as an asset class could be an option.

 

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Currently, the major factors driving gold prices include safe-haven buying during an uncertain economic scenario, inflation hedging and traditional demand. During the year, the euro zone debt crisis has been the main factor that supported the upside in gold.

 

It also concerns with regard to the euro zone crisis, rising oil prices and enhanced money supply across the globe will lead investors to flock towards gold as an important asset class. While gains in gold should continue in the next three-six months, the long-term view on gold continues to be bullish, but with a moderation in gains from here on.