Financial Market Fears Should Continue to Support Gold
Source: Seeking Alpha, Mark O'Byrne (3/3/09)
". . .large emerging economies are seeking to raise their gold reserves."
Gold has fallen, as well, but not by as much as most equity indices. While U.S. indices were down between 4% and 5% yesterday, gold was only down by $3.00 to $938.80/oz. It fell as low as $920/oz in Asian and early European trading.
The Bank of England may soon embark on quantitative easing, involving printing money to buy assets. Such measures may lead to serious weakness in major currencies and create significant inflationary pressures in the UK, U.S. and internationally. This is what Warren Buffett fears, as per his warnings regarding the "onslaught of inflation" yesterday.
Fear and risk aversion continue to grip international financial markets and this should see gold well supported in the coming days. This is especially the case as there are increasing concerns internationally regarding a sharp depreciation of the dollar. Thus, large emerging economies are seeking to raise their gold reserves.