Gold will again benefit from European banks' debt troubles and the occasional snag involved in the U.S.' economic recovery, a top researcher at an exchange traded product company told reporters.
Investments in the precious metal will resume as a result of those two factors since investors will be searching for a haven for assets, according to Nick Brooks, research head for ETF Securities. He underscored the troubles at European banks as being especially motivational to the value of gold.
"Those sovereign-risk issues are going to come back, most likely," he said during a Wednesday conference call. "Debt levels are continuing to rise."
Brooks said the precious metal will capitalize because maintaining low rates on borrowing costs will be among the efforts that governments deploy to spur an economic recovery.
"If you look at credit-default spreads, they’re all at extremely elevated levels," Brooks said. "That sends signals that growth isn't on as firm a footing as people think. Those concerns will come back and support gold."
Shortly after 10 a.m., gold was down 0.34 percent, a $4.50 reduction to $1,327.80 per troy ounce. Silver was down 0.09 percent, a reduction of 0.025 cents to $26.78.
April-delivery platinum was up $4.80 to $1,792.10 per troy ounce and March-delivery palladium was up $6.70 to $791.45 per troy ounce.
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