Banking sector fall-out leads investing in gold drive
Woes in the banking sector have increased the appeal of gold as a safe haven, Reuters reports.
Tom Pawlicki, a precious metals and energy analyst of MF Global, believes concerns surrounding banks in the wake of worsening economic conditions has boosted demand for gold, making it a more attractive long-term investment.
"Gold's strength seems to be based on worries over the banking sector, which has set the market onto an upward path," he told the news provider.
According to the expert, investors are putting their money into gold in response to Royal Bank of Scotland's announcement of sizeable losses and news that Bank of America required extra governmental support.
What's more, the finance head of trading at MKS, Afshin Nabavi, told Reuters demand for physical gold was also on the rise.
"There has been demand for physical kilobars and coins," he confirmed.
This view was echoed by Merrill Lynch chief investment officer Gary Dugan in an interview with the Daily Telegraph recently.
"It is amazing how many clients want physical gold," he told the newspaper. "They are so worried, they want a portable asset in their house."
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