As people are shifting their demands from the Dollar and the Euro and seeking Gold as a safe haven, Gold prices have reached an all time high of USD1,258. The Euro plunged 14% against the Dollar as a result of the increase in concerns over the Euro zone debt crises, as opposed to that, Gold has increased 13% and its estimated that Gold prices still have some room to increase.
The chart below depicts the negative correlation between Gold and equities represented by the Dow Jones Index.
(No Ratings Yet)
Loading ...Tags: Down Jones, Gold
Gold is servig its historical role as a safe haven, a store of value, and an alternative form of money considering the debt burdens governments are facing. With the rally in Gold prices, the public still doesnt own much gold. Jim Rogers reported at a conference of 300 managers last month, 76% admitted they still own no gold. Yet, most hedge fund managers I have met are very bullish on Gold with some betting that it will break the $3,000 level. Gold is the hot commodity of 2010. John Paulson launched in January Paulson Gold Fund which focuses on gold mining stocks and gold ETFs and forwards. Paulson bets that gold will continue to rise due to paper currency depreciation.
[Reply]