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Gold: Private Investors Rush for Safety
A leading bullion dealer said that demand for gold has risen 50pc since last year and that it now holds more than 30 tonnes of gold worth more than £1bn on behalf of private investors. It is the first time it has broken the £1bn barrier it said.
Adrian Ash, head of research at BullionVault, said: “While gold may slip out of view for some when prices ease back, as they have done since last summer’s record highs, private investors are using this lull to build their gold holdings.
“Increasing numbers of people are becoming disillusioned with the credit-risk and low returns of traditional high street saving products. Given this backdrop, it is no surprise that savers are continuing to turn to the world’s oldest store of wealth.”
Gold has perched above $1,600 as prices are being supported by persistent worries over Spain’s surging borrowing costs.
Reuters said that gold has attracted occasional safe-haven flow in the past few weeks, after moving in tandem with riskier assets since late last year as the euro zone debt crisis squeezed liquidity and rattled financial markets.
“In the short term, gold prices may remain very volatile following the ebb and flow in the news on Spain and euro zone crisis,” said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
“But expectations on monetary policy have shifted a little after the bad numbers on the U.S. job market and China’s recent rate cut raised hopes on further easing, which will help gold climb after the near-term fluctuation.”