Are We in the Midst of a New Gold Rally?

George Soros, the man who made over $1 billion by short-selling the sterling pound in 1992, has more than doubled his holding of gold over the past few weeks.

Soros has been investing heavily in the U.S. listed exchange traded fund GLD, the SPDR Gold Trust, of which he now owns over 6 million shares worth around $680 million.

Why is he investing in gold?

We have long held the view that gold is a key player in the currency markets, and as such, its performance and future forecasts should be measured against world currencies. Recent events involving big currencies has led to the gold price gaining momentum.

Gold has been lingering around $1,100 to $1,200 for quite some time. What could cause a gold rally from here?

The dollar has long been the safe play when markets are turbulent. Indeed, we did see a short rally last week. But the overall impetus is on a downward trend for the dollar. This fact is supported by the Chinese hedging against the dollar of late.
So could gold be set to surge?

Gold seems to be the safest option out there; with investors opting for security, the gold price is in an ideal position to capitalise on the fears and weaknesses of fiat currencies.