Gold is likely to continue to provide a safe haven to investors | Eurobank
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Gold is likely to continue to provide a safe haven to investors

• Gold prices have climbed to all-time nominal highs of $1895/toz in early September 2011, benefiting from the official sector’s return as net gold buyer and from investors seeking protection against growing concerns over the sovereign debt crisis.
• The medium term outlook for gold is positive since the same factors that pushed gold prices to historical nominal highs are expected to shape price dynamics over the next quarters.
• Inverted US 10 year real yields, which exhibit a very strong correlation with gold, are likely to decline further, suggesting upside risk to gold prices.
• However repetition of short-term price corrections cannot be ruled out, considering further liquidations for profit taking by short-term investors losing money in other asset classes.