Gold rally 'will not continue in 2010'

Investors who purchase gold should not expect to see large returns during 2010, one adviser has warned.

Adrian Lowcock of Bestinvest noted that while a ’bubble’ in the market for the precious metal has not formed yet, its price is unlikely to continue the rapid rise seen recently over the next 12 months.

He explained that the fundamental drivers of the gold market - the dollar and inflation - will not be favourable next year.

’The dollar has been weak and it would need to continue to be weak for gold to continue to perform. We don’t think that’s necessarily going to be the case,’ he stated, adding that an increase as a result of inflation is unlikely.

Mr Lowcock added that he ’wouldn’t be surprised’ if the metal ended 2010 at a lower level than where it is now.

Yesterday, a weakening in the dollar helped the price of gold to rise to $1,105.65 (£688.314) per ounce.ADNFCR-2318-ID-19534196-ADNFCR