Currency hedges advised for gold investors

Ongoing fluctuations in the world’s financial markets are offsetting any gains made in gold investments, it has been reported.

According to newly-compiled statistics from the Daily Telegraph, the London gold price fix has risen by 2.2 per cent over the past six months from $920 to $939.

However, over the same period, the value of the US dollar has fallen sufficiently to negate any gains made by UK-based investors in gold.

The report noted: ’In fact, if you had bought an ounce of gold six months ago, the $920 needed would have cost £639.

’If you now sold that gold, the $939 it would fetch would convert into just £562. This is a loss of £77 or nearly 12 per cent - even though gold has appreciated by 2.2 per cent over the period.’

Despite this, the report added that growing numbers of private wealth management specialists are now advising in favour of gold funds which hedge against currency fluctuations.

According to the World Gold Council (WGC) the all time high price of gold was seen in March 2008, when one ounce was valued at $1,030.



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