Safe Haven: Gold run to continue for 12th year

MILAN: Gold prices are set for a 12th consecutive year of gains despite volatility, with investor demand likely to be spurred by unfolding euro zone sovereign debt crisis, a senior official of the World Gold Council (WGC) said on Thursday. Gold has a close negative correlation with the dollar, whose strength makes commodities priced in the US unit more expensive for holders of other currencies and curbs gold’s appeal as an alternative asset. While gold has outperformed the euro so far this year - the single currency is down 3% versus the euro, while gold is up 1.5% - the dollar’s strength is weighing heavily on prices. As the euro zone crisis unfolds, with shocks such as Greece dropping out of the common currency unit on the cards, investors are likely to rediscover the safe haven value of gold, WGC investment MD Marcus Grubb said.

Published in The Express Tribune, May 13^th, 2012.