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Gold Climbs to Seven-Month High as Economy May Worsen
Key Excerpts from Article on Website of Bloomberg News
Posted: February 21st, 2009
http://www.bloomberg.com/apps/news?pid=20601082&sid=acerPa4t...
Gold rose to its highest [price] in almost seven months in London as investors bought the precious metal to preserve their wealth on speculation the global economy will deteriorate. Bullion has climbed 33 percent since October as governments lowered interest rates and spent trillions of dollars to combat the recession. The very big uncertainties in the stock market and economy are driving investors into gold and precious metals, said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. Gold for immediate delivery rose as much as $25.40, or 2.7 percent, to $967.15 an ounce, the highest since July 22. April futures gained $22.10, or 2.4 percent, to $964.40. Some investors are buying precious metals on speculation government stimulus packages [and bank bailouts] will spur inflation, Fertig said. Treasury Secretary Timothy Geithner last week pledged as much as $2 trillion in financing for programs aimed at spurring new lending. The Treasury will likely borrow a record $2.5 trillion this fiscal year ending Sept. 30, according to Goldman Sachs Group Inc. Investors have been aggressively adding physical gold to their portfolios as concerns about counterparty risk increase, ETF Securities wrote in a report. Investors are hedging against the risk of currency depreciation and longer term inflation risks as government debt projections balloon. Gold has become, for all intents, the worlds second reserve currency, Dennis Gartman, an economist and the editor of the ... Gartman Letter, said.
Note: For many revealing reports on the realities of government bailouts of banks worldwide, click here.
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