Gold price increase boost for private banking?

Private banking investors may be interested to learn the price of gold crept back up on the financial markets after a fall last week.

This morning (December 13th), the price of gold per ounce was up 0.3 per cent to $1,387.25 (£881) after a decline of 2.2 per cent the previous week, Reuters reports.

Seasonal demand from India and China is thought to be a factor behind the rise, as is the fact that the Chinese rate of inflation has soared to a new two-year high, which could lead to a tightening of monetary policy in the country.

Peter Fung, head of the dealing department at Wing Fung Precious Metals in Hong Kong, said: "The physical market is very good. Bullion traders and some jewellers are buying, as well as some individual customers who prefer to sell currency and buy gold." 

Prices could go up further if the US Federal Reserve decides at its meeting tomorrow to inject more money into the economy, the news agency concluded.

In 2009, investment demand for gold rose higher than that for jewellery made from the precious metal for the first time in 30 years, according to the Financial Times. ADNFCR-2318-ID-800287343-ADNFCR