Investors looking for a traditional safe harbor in light of ongoing jitters in the stock market may want to take a closer look at gold futures.
Gold has enjoyed a price run-up over much of the last decade, but investors are still attracted to the precious metal because it is seen as a traditional safe haven during times of economic instability. Precious metals prices have been further sustained in recent months by demand from consumers and manufacturing operations in developing nations – particularly India and China.
In light of ongoing economic problems across the European Union, conditions are further primed for gold to deliver returns to its investors, even though observers have remained divided on how prices for the precious metal can actually go.
According to a report from Reuters, gold reached its highest price in nearly two weeks on Tuesday due to fresh concern about the euro. In this case, the concern was triggered by a downgrade of Spain’s debt rating.
Looking ahead, the euro instability has strong potential to weigh significantly on gold prices for the foreseeable future. Some observers are concerned that a nearly $1 trillion bailout package for Greece will be little more than a temporary solution, and that in the longer term, some countries could end up dropping the single European currency because of fiscal problems.
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