Gold Prices Justified By Fundamentals Says Queen's Bank

AN ECONOMIST at Coutts & Co – banker to Her Majesty The Queen – says Gold Prices remain justified at current levels.

Carl Astorri, head of economics and strategy at Coutts, says the Gold Price "has not yet broken away from fundamentals and become a bubble".

"The combination of secular trends, historic investor behavior, incremental demand drivers from emerging markets, the move away from the US Dollar and the demand for a hedge against fiat currency weakness would all support further gains for gold," he wrote in a piece for Citywire on Monday.

Astorri added that gold provides "ballast [to a portfolio] in times of uncertainty", since many developed economies face "a strong temptation" to weaken their currencies in the hope of boosting growth.

"Gold is the one currency that central banks cannot print more of to buy up government debt."  

Astorri's comments echo those of renowned contrarian investor Marc Faber, who in April refuted the notion that Gold Prices had entered bubble territory.

At last month's Ira Sohn conference Faber recommended storing gold in various locations around the world as a precaution against future crises.

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