Gold 'will see a more sustained run'
Investors feeling threatened by increasing uncertainties in the financial sector will put their money into gold, creating a sustained good run for gold prices.
This is according to Matt Zeman, a metals trader at LaSalle Futures Group - the commodity advisors and futures brokerage headquartered in the Chicago Board of Trade.
He said that people are concerned about the possible collapse of mortgage giants Fannie Mae and Freddie Mac and as such, are looking for a safe haven for their assets.
"Gold is catching a flight-to-quality bid. People weren't as concerned about inflation in March [when gold prices hit record levels], but that's kind of changed now," he told Bloomberg.
"The credit-market losses are going to continue, you're going to see more banks failing and the dollar should continue to lose ground. You'll see a more sustained run on gold.''
Gold prices are currently testing the $1,000 an ounce mark thanks to falling equities and the slump of the dollar.
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