Gold Fundamentals Will Prevail Despite Market Crisis

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Gold could be a beneficiary of the sub-prime crisis as declining US real interest rates could provide strong support for the price of bullion, said Craton Capital Precious Metal Fund.

The US sub-prime market crisis is mainly a financial one, will probably not derail global GDP growth, and only have a temporary impact on investors' risk perception. Gold could be a beneficiary of the sub-prime crisis as declining US real interest rates could provide strong support for the price of bullion, said Craton Capital Precious Metal Fund.

The fund's view is that the sell-off in small to mid-sized companies during the August market turmoil was not based on fundamental and sector specific factors. It believes the relative under performance of this asset category was typical in a market correction of this nature.

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