Gold investment rising as banks 'fall to Big Brother'
An analyst at Heritage West Futures Inc explained yesterday (September 29th) that the plight of banks around the world is spurring gold investment.
Since the subprime mortgage crisis began around a year ago, banks and brokers have had to withstand almost $600 billion in credit losses and writedowns as they tighten their purse strings.
Bailouts appear to be the order of the day, with Citigroup buying Wachovia Corp's banking operations and governments rescuing Bradford & Bingley, Fortis and Hypo Real Estate Holding AG.
Now Ralph Preston, from San Diego-based Heritage West, has commented: "Gold is catching a bid as concerns spread that the global financial system is walking on pins and needles as banks worldwide continue to fall into the pockets of Big Brother."
The situation is leading many investors to rush to gold for its safe-haven qualities and the lack of alternative investments elsewhere.
Although some commentators have suggested that this could be a short-term fad, the World Gold Council (WGC) reported recently that investor have doubled their gold bullion assets in the past two years.
And as Miguel Perez-Santalla, a sales vice-president at Heraeus Precious Metals Management in New York, explained, there is no reason for this trend to be reversed in the current climate.
He said: "Gold will continue to hold its value as investors value protection as the key in these turbulent times."
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