Gold Rallies on Slovakia Ratification Concerns

October 17 00:00 2011

New York, October 17 ( – Gold continues to rally as the roller coaster European crisis shows no signs of stopping in sight. The first half of the day was seen to be bullish as stocks all over the world were rising on confidence boost because of the Troika approval of the bailout. However, later the news emerged that Slovakia is yet to ratify the amendments in the bailout. Hence the bailout is not final, hence there is a possibility of a collapse. This led investors to rush towards gold which is glittering more than ever.

Some analysts say that there is no reason that Gold should not rise irrespective of whether Slovakia ratifies the amendments or not. This is because the bailout package is not reversing any damage which has been done by Europe’s haphazard fiscal and monetary policies, but is rather delaying their effect.

In case, there is no bailout, the Greek collapse is imminent. This would bring the entire fiat currency system of Europe being wiped out. It is logical that Gold will prevail in such a scenario and demand for Gold will go through the roof. On the other hand, if there is a bailout, more currency will be printed, thereby reducing its value. This too makes gold more valuable in terms of currency.