VM Group analyst Matthew Turner suggested yesterday (January 26th) that investors are looking for a flight to safety through gold as the banking sector's woes continue, Reuters reports.
The yellow metal has climbed above the $900 per ounce mark in the past few days, taking it to its highest level for three months and continuing its strong performance in recent weeks.
Mr. Turner explained that the ongoing fall-out from the credit crisis is bound to have an effect on the dollar, which is being reflected in the current trend towards investing in gold.
He told the news provider: "Gold is rising on the fallout from the renewed banking crisis. The banking crisis is bad for share prices and creates fear and panic. Some investors are thinking gold is the safest option."
The analyst's comments come after Donald Coxe, a well-known former financial strategist with BMO Nesbitt Burns, also threw his weight behind the belief that gold prices are set to rise.
"Once people realize the economies have stopped going down and have started coming back, then they are going to look at all the liquidity in the system and that will be the point we'll probably start seeing the substantial rally in gold," he told globeinvestor.com.
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