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Gold Prices will remain high 'even if banking system collapses'

People who Buy Gold will not lose out should the banking system collapse, it has been stressed.

While bankers might still be pushing for bonuses, concerns remain about the extent to which banks remain exposed to toxic loans and the effect this is having on their balance sheets and ability to lend.

However, Graham Birch of the Black Rock Gold and General fund has noted that Gold Investment is a much safer bet, the Times reports.

"Gold operates outside the banking system. It will retain its value even if the banking system collapses," he told the news provider.

Gold Investment has proved far more lucrative than the stock market in recent months, with the yellow metal increasing in value by one percent over the last year and the FTSE 100 declining by 40 percent over the same period.

This confirms gold's status as a safe haven in times of economic uncertainty.

Subodh Gupta of Anand Rathi Commodities recently suggested that demand for gold would continue to rise despite being close to its historic peak.

"Gold has been spurred by the sudden investment demand, with all economies looking very uncertain. One can expect gold to go up even more," he told the Economic Times.

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