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Investors Flock to the Security of Gold

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Economic tensions made gold prices surge by 2% to a new high of nearly $ 1830 an ounce on Thursday. The bullion went for its seventh straight weekly gain hot on the heels of the Dow Jones industrial stock plunging 5% and crude oil falling 7%. Investors went for the security of gold and US government bonds as they sold stocks and other riskier assets.

Axel Merk, portfolio manager of Merk Funds said that they held gold because they believed that inflation would be part of the solution to address the problems of the world. Mr Merk manages the Merk Funds portfolio that has $ 750 million in assets.

Morgan Stanley cut its forecast for global economic growth for this year and 2012 on Thursday. They said that the US and 17 other Euro using nations were hovering dangerously close to a recession. The spooked investors were thus seeking out the precious metal as a protection measure. Gold is the traditional remedy for times of inflation when wealth concerns hit.

Jon Nadler, an analyst with Kitco Metals said that the Dow Jones Industrial Average was down more than 400 points at the end of Comex floor trading. He added that when you have this type of uncertainty and volatility, people do tend to take refuge in what they perceive is a safe harbor.

Joel Scanlon

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Joel Scanlon

Joel relocated to Australia in 1995 from the United Kingdom and spent five years working in the mining industry as an exploration geotechnician. His role involved utilizing GIS mapping and CAD software. Upon transitioning to the North Coast of NSW, Australia, Joel embarked on a career as a graphic designer at a well-known consultancy firm. Subsequently, he established a successful web services business catering to companies across the eastern seaboard of Australia. It was during this time that he conceived and launched News-Medical.Net. Joel has been an integral part of AZoNetwork since its inception in 2000. Joel possesses a keen interest in exploring the boundaries of technology, comprehending its potential impact on society, and actively engaging with AI-driven solutions and advancements.

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