'Panicking' investors moving to buy gold
The whirlwind week of turmoil in the US financial markets is leading concerned investors to seek solace in the safe haven of gold.
That is the view of Subodh Gupta, a research analyst at Anand Rathi Commodities, who has explained today (September 21st) that demand for gold buying is on the rise.
Following the collapse of Lehman Brothers, it has been rumoured that other major investment banks Morgan Stanley and Goldman Sachs could now be under threat.
In addition, the US Fed and the Treasury were forced to bail out major insurance company AIG with an $85 billion loan and Merrill Lynch was taken over by Bank of America.
Mr. Gupta told the Economic Times in India: "Panicking investors, who have seen their net portfolio worth dwindle in other asset classes, are parking money in gold.
"Investment demand is expected to support gold prices and we remain bullish on gold prices from long-term perspective."
Meanwhile, a report from Angel Commodities has corroborated that assessment, claiming that it does not believe the dollar's strength against major currencies can persist.
Considering gold prices have an inverse relationship with the dollar, the consequence of further financial instability would be sharp rises in the price of the yellow metal.
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