The slump in gold prices in the last eight months will continue into the new year as people begin to seek out riskier investments, according to AM Ruthven & Associates Ltd. Advertising Figures from Clerical Medical published last Thursday revealed a 28 per cent drop in the commodity during the eight months to the end of October, to £492 an ounce from a peak of about £684 an ounce in March. But this was still 8 per cent up on August last year. Alec Ruthven, director of Taunton-based IFA AM Ruthven & Associates Ltd, said he anticipated this trend would continue but he claimed gold had been "a fantastic investment" for the last "three to five years". He said: "Looking forward from now, I am not sure I would be putting money into it because, as people start to get happier about the economy, a lot of the smarter money will be coming out of gold. "Capital values will start to reduce as people try to buy into areas where there are bargains, unless something really horrible happens and people panic and go back to safer investments like gold." Martin Ellis, chief economist of Clerical Medical, said: "The average price of gold reached a record high in March as investors sought to safeguard the value of their investments against a backdrop of financial market turmoil, rising inflation and a weakening US dollar. "Gold prices, however, have fallen back since then with the strengthening in the value of the US dollar a key factor behind this reversal."

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