Tuesday, May 4, 2010

Deutsche Bank Says Gold Likely To Sink When Recovery Comes

A Reuters report focuses on a statement made by Deutsche Bank's global head of metals predicting gold will fall once sovereign-debt uncertainly is displaced by global recovery:
Over the past two years, investors seeking a safe haven from the global economic uncertainty shifted their investments to physical and gold securities.

However, the precious metal is likely to lose its lustre when economic growth recovers and confidence in governments' ability to repay debt grows, said Raymond Key on the sidelines of an industry event in Dubai.

"In three or four years, the extent of the uncertainly in the market might decrease and this would lead to the dramatic downfall of gold investments," he said.

"Gold does not return any dividend like other assets, so if faith returns in the global economy we will start to see a move away from gold," he added.
He does believe that gold will stay up for the time being.

Of course, his scenario assumes that growth will come without a ramp-up in inflation...

No comments:

Post a Comment