Gold to be more expensive

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According to a new research study from Standard Chartered Bank, the price of gold will rise above $2,100 an ounce, by the year 2014. A strong demand will be registered for this yellow metal, over the next three years. This can be attributed to the weak dollar and high demand from the Asian countries, such as India and China.

Though the market saw a slight decrease in the gold prices last week; investors remain bullish on gold in the long term, as concerns on rising inflation, among other factors, continue to burnish precious metals safe-haven appeal.

Investment in commodities is not purely cyclical and in five years time we are going to see commodity prices that are even higher than what we see today, said Steve Brice, Chief Investment Strategist at Standard Chartered Bank. He also added, Gold is not heavily correlated to the equity markets so it has clear benefits for investors looking to diversify their portfolios. A strong growth in the average incomes of China and India will support gold prices.

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