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IMF stays tight-lipped on gold

THE International Monetary Fund (IMF) is generally not shy about coming forward with its opinions.

With the current state of the world, most hang on its every word, and it freely gives economic forecasts and airs its views on how countries, including our own, run their finances.

But it adopted a tight-lipped policy yesterday when it came to the conundrum of gold.

To invest or not to invest, and is it a bubble?

One notable global bank believes it to be the case. Analysts with French finance giant Societe Generale said earlier this month that the price was veering into bubble territory.

Gold fell the most in two years on Monday, raising fears that the gold price bubble had burst.

But the IMF's chief economist, Olivier Blanchard, wouldn't take the bait.

"Only a fool would try to predict it. Only a fool would try to explain it," he quipped.

The commodity, which had been used by many investors as a hedge against the economic turmoil in Europe, had trended at nearly $1,800 (€1,365) as recently as October.

Irish Independent