SOURCE: The Bedford Report

The Bedford Report

January 06, 2011 11:25 ET

Gold Rush in Jeopardy Following China's Rate Hike

The Bedford Report Provides Analyst Research on Yamana Gold & IAMGOLD

NEW YORK, NY--(Marketwire - January 6, 2011) - After surging close to 30 percent in 2010, Gold prices have been volatile to kick off the New Year. With European debt currently in crisis mode, the US Dollar has had a relatively strong couple months, hurting the precious metals market. Traditionally, when the greenback gains value, investors become more wary of the precious metals as their prices often move inversely to the US dollar. Moreover, a late 2010 interest rate hike from China caused additional concern for Gold investors. The Bedford Report examines the outlook for the Gold Market and provides research reports on Yamana Gold, Inc. (NYSE: AUY) & IAMGOLD Corporation (NYSE: IAG). Access to the full company reports can be found at:

On Christmas day, China raised interest rates in an attempt to counter the fastest inflation in more than two years. China increased rates by 25 basis points to send one-year lending rates to 5.81% and the one-year deposit rate to 2.75%. Higher interest rates in China could hurt gold demand as it increases the opportunity cost of holding the yellow metal. According to a report by the World Gold Council, China is quickly catching up to India as the largest gold consumer in the world. In the third quarter or 2010, jewellery demand rose 8% and demand for gold bars and coins surged 64% from year earlier levels.

The Bedford Report releases regular market updates on the Gold Market so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Increased optimism in employment numbers could also hurt the price of Gold. When economic data -- particularly job data -- disappoints, investors traditionally take haven in precious metal markets to avoid currency fluctuations. Conversely, when job data improves, investors tend to stray from precious metals. Yesterday a survey from payroll processor ADP found that private companies added 297,000 jobs last month, significantly higher than the 100,000 economists projected.

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