Gold Could Come Into Its Own As True Safe Haven - Scotiabank

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"Record investor inflows into gold ETFs. . .have also lifted precious metals prices, as retail and institutional investors seek a 'safe haven' from volatile currency and equity markets."

Scotiabank economist Patricia Mohr says the big picture outlook for gold remains bullish, suggesting "gold could come into its own as a true 'safe haven' in coming months."

Noting that gold prices have outperformed base metals in the past six month, Mohr advised, "In view of a massive U.S. budgetary deficit likely to surpass US$1.25 trillion in FY2009, Asian and Middle Eastern central banks and sovereign wealth funds may seek to diversify away from U.S. Treasury Bonds and agency debt."

In her monthly analysis of the Scotiabank Commodity Price Index, Mohr highlighted "record investor inflows into gold ETFs...have also lifted precious metals prices, as retail and institutional investors seek a ‘safe haven' from volatile currency and equity markets."

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