“Good for gold”

“The European Central Bank will have to create more money to assist the debt burden in Europe, and that will be good for gold,” said Standard Bank analyst Walter de Wet, who said he expected the gold price to rise to $2,000 an ounce.
Increasing liquidity can aggravate price pressures, making gold more attractive as an asset seen to hold its value better than paper currencies during times of high inflation.

“It is still unclear whether a new government in Italy will be able to successfully consolidate its budget without external help. Gold should therefore continue to profit from the persisting high uncertainty,” said Commerzbank in a note.

The euro was slightly higher on the day, changing hands at $1.3641 and staying above a one-month low of $1.3484
touched on Thursday. For the week, the euro is still down about 1.5 percent.

Investment flows into gold-backed exchange-traded funds ontinued this week. SPDR Gold Trust, the world’s largest
gold ETF, reported a fifth straight day of gains in its holdings — reaching 1,268.666 tonnes by Nov. 10, the highest since late August.

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Posted by admin on Nov 11 2011. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry