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MSN Money: Gold Looks Back to Lehmans in Euro Crisis

LONDON, 11 November 2011 - Analysis of the latest gold-price action from US finance site TheStreet - re-published by MSN Money - today quotes BullionVault head of research Adrian Ash extensively.

Part of Microsoft's portal, the 14th busiest website in the United States, MSN Money carries TheStreet's story in full.

"If the crisis really abates, then gold might see a 'relief selloff'," says TheStreet senior writer Alix Steel, quoting a telephone interview with Adrian.

"Ash also thinks that MF Global had a bigger impact on the gold futures market as it sucked the hot money out of gold, which would also explain why the metal has had a hard time making record highs despite panic over Greece and Italy.

"Ash thinks gold is torn between inflation - if the European Central Bank has to print money to save Europe - and deflation, as European banks are responsible for half of global credit supply. In 2008, when the destruction of Lehman Bros. caused a deflation panic, the gold price in Dollar terms lost a third of its value but in the pound and euro it hit new records. Ash thinks something similar could happen this time around."

"As the oxygen came out of the futures market," says Adrian, "you had physical demand coming through. When the two met then gold rose very sharply."

You can read Alix Steel's full report on TheStreet or on MSN Money...

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MSN Money