Gold Rises Third Day In A Row

October 07 00:00 2011

New York, October 5 ( – Fears of a possible Euro debt crisis ensuing and jeopardizing the combined currencies of 17 sovereign states have fuelled the rise of gold prices again. Prices have been rising for the third day in a row as panicking investors are quick to offload their dollar and Euro holdings and exchange it for gold.

Gold has a proven record of being a safe haven currency. Even in the recent collapse of the Zimbabwean dollar, the country came back to gold standard. Since the market for globe is truly global with no liquidity woes, panicking investors want to park their funds in this asset. Moreover, gold has always been used as a medium of exchange before the world came on to a fiat currency model when President Richard Nixon acting on behalf of the US unilaterally called of the Gold standard.

Thus as investors are wary of any trouble, they resort to going back to gold. However, as gold is breaking record highs each and every day what remains to be seen is whether the price of gold is indeed supported by fundamentals or is it as George Soros calls it “the ultimate asset bubble”.