In a bid to regain its safe haven status, gold attain one-month highs in major markets around the world on Wednesday as it rose above $1,700 per ounce in the wake of increased demand for the yellow metal occasioned by apparent delay in resolving the debt burdens hanging on many countries in the Eurozone and the US consumer data that reveals consumers’ positive sentiment.
Gold seems to be regaining its traditional role as a safe haven from wealth erosion and as a contrarian gauge after plunging as much as 20 per cent of its $1,923.70 per ounce attained early September behaving much more like an asset susceptible to inflationary risk. ‘’Gold seems to have regained the confidence of investors at its low level prices of $1,600s, hence the market is witnessing the activities of investors who are returning back’’ said Scott Gardner, the chief investment officer of the Panama based Verdmont Capital SA.
Meanwhile, an unconfirmed report in the German newspaper, Bild, says that the gold reserves in the Bundestbank may be used as collateral if the European nations, particularly Greek creditors, fail to meet their obligations toward their loan repayments and the World Gold Council data shows that Germany’s gold reserve of 3,401 metric tons is the world’s biggest after the United States.
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