Gold had its worst month for 25 years in August with prices correcting by more than 20 per cent from the all-time high of $1,030 an ounce seen this March. But there are many good reasons to believe that gold will bounce back in September, both as a hedge against surging inflation and a currency which no central bank can control at a time of a global financial crisis.

Arabian investors have already sensed a buying opportunity, and as Emirates Business reported last week gold sales in Abu Dhabi were up by 300 per cent in August. Nobody here believes gold prices will stay down for long, and experts are forecasting that prices are set to rise by 25 per cent during Ramadan, particularly towards the end of the Holy Month.

The Indian religious festivals always favour a pick up in the gold price in the autumn, and indeed this is the usual trading pattern for the yellow metal, with a strong upturn after a low in the summer. Buying of gold as a gifts or Christmas and New Year then follows.

In fact, figures from the Dubai Multi Commodities Centre showed a huge increase in the gold trade in Dubai in the first half of 2008 with a 48 per cent surge to $13 billion. And the DMCC reports that physical shortages of the precious metal have been annoying dealers with gold increasingly being treated as a hard currency.

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