"...There are several key factors coming together at the same time and all of them are bullish for gold. But if we had to boil it down, the bottom line is uncertainty. This makes investors nervous, which has always been good for gold. But is this response rational?
We think so. Gold is the ultimate safe haven and as the economy stumbles, demand for gold has grown. That's been the case for almost a decade. In the second quarter of 2010, for instance, the economic indicators were down and gold demand was up 36%.
Investors are concerned. Not only did the economy falter this month, but the stock market declined as well. This has fueled uncertainty about the government's policies, the potential for a "double dip" recession, and the danger of a deflationary period.
At times like this, safety becomes the paramount consideration. Risk is avoided, and that's when gold shines. Gold provides a shelter from the storm, regardless of what lies ahead. The ongoing rise in the gold price has reinforced this maxim..."
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