Poor Economic Results Prompt Investors To Convert Assets To Gold
Due to persistent economic weakness — which has spurred fears of a jobless recovery or even a double-dip recession — many investors seem to be looking for safety in assets that are more stable over time than stocks.
These assets include precious metals such as gold, whose futures rose by $3.30 and closed at $1,280.80 per troy ounce on New York Mercantile Exchange on Sept. 20. This marked the third record high in as many sessions and some commentators attributed it to the expectation that the Fed will keep interest rates close to zero, raising the fears of inflation.
Senior manager at Saxo Bank Ole Hansen told Reuters that employment, housing and other economic data point towards investment conditions favoring gold.
"A move higher to between $1,300-$1,350 [per ounce] could be a good target toward year-end," he predicted.
The economic situation has also continued to cause the dollar to weaken against the basket of six other currencies, as the U.S. dollar index fell by around 0.3 percent on Sept. 21.
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