US Sub-Prime Crisis to Boost Gold

Source:

Gold's traditional role as a safe haven asset in times of financial turbulence and instability is enforced in the current market as the metal recouped the majority of losses which occurred in a flight to cash in the beginning of August, said Dr. Peter Richardson, strategist of Craton Capital in a recent article.

The crisis in the US sub-prime mortgage market could bolster the gold price not only because gold provides a safe investment haven. The crisis is expected to slow GDP growth, spurring lower real interest rates and a weaker US dollar that will boost gold investment demand.

Gold's traditional role as a safe haven asset in times of financial turbulence and instability is enforced in the current market as the metal recouped the majority of losses which occurred in a flight to cash in the beginning of August, said Dr. Peter Richardson, strategist of Craton Capital in a recent article.

Supporting this view is the fact that gold recovered despite a rise in the US dollar caused by a European Central bank intervention that boosted liquidity in Europe.

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