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Gold Investment Leads Q2 Returns But "Not Over-Valued"

DATA FOR the second-quarter of 2010 shows Gold Investment beating all other asset classes, but it's still "not over-valued" according to a detailed new report.

Mining-backed research and market-development group the World Gold Council said Tuesday that Gold Investment showed an 11.5% return between April-June, outpacing silver (7.1%), US Treasury bonds (4.7%), and a raft of losing investments from developed and emerging-market equities to crude oil, soft commodities, base metals, platinum and palladium.

"While the Gold Price continued to reach record highs during Q2 2010," say analysts Juan Carlos Artigas and Louise Street in the WGC's latest Gold-Investment Digest, "relative to the price of various other asset classes [it] does not appear to be overvalued by historical standards."

Gold Investment demand between April and June, spurred by the Greek deficit and Eurozone debt crisis, came from coins and small bars, exchange-traded products (Gold ETFs), and "in particular...Allocated metal accounts" – where gold is stored securely, and for a fee, but with ready access to London's deep and liquid professional bullion market.

"Gold remains an important vehicle for wealth preservation," the WGC's report concludes. In the second-quarter, "investors sought out protection against tail risk [plus] diversification."

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