A commodities analyst at the second-biggest bank in Germany has claimed today (February 3rd) that the current gold price is being maintained by people investing in the yellow metal, Reuters reports.
Eugen Weinberg, of Commerzbank, has explained that investors are currently afraid of the systemic risk involved in equity markets and are looking for a store of wealth.
Investing in gold has traditionally provided a safe haven in periods of economic turmoil and Mr. Weinberg has explained that the current level of gold buying is reflecting that belief.
"Gold is currently working as a 'fear indicator', signaling risk aversion of market participants," he told the news provider.
Some commentators have declared that the historical relationship between gold and the dollar - namely that they move in opposite directions - has been disbanded as both have strengthened in the past few days.
However, one New York-based precious metals trader, who wished to remain anonymous, told the news provider that ongoing concerns over the greenback are pushing investors to buy gold.
"People are looking at the longer-term prospect. Everything is in trouble now and who knows what's going to happen to the dollar in the longer run. So, gold is perceived to be safer," said the trader.
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