Monday, 26th July 2004 (3606 views)

The price of gold could be set for an increase according to a new survey.

Since the price of the precious metal is now at its lowest for a month, jewellers are expected to be encouraged into increasing purchases, helping to create a rise in price.

Findings from GFMS research on 48 traders, found 24 businesses advised on buying gold, which dropped four per cent last week to $390.50 an ounce.

Zhong Yan, a trader at jewellery maker Shanghai Lao Feng Xiang Co told Bloomberg: "Buying gold at the current level will help us to reduce the costs."

In addition jewellers will increase purchases more quickly when the prices drop in order to limit any sell-off in the gold market and current terrorism concerns could also help.

Reports also suggest that the price decrease could lead to mining companies avoiding contracts that lock in prices for future delivery and some may also wish to leave earlier contracts.

 

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