DUBAI: Gold will remain a safe haven for investors in what is one of the worst financial crises in history, despite the recent price volatility, a senior industry official said yesterday. Gold bullion has dropped nearly 20 percent since October after a recent wave of fund selling, but still offers the diversity and value which investors will be looking for in a climate of high risk, said Rozanna Wozniak, investment research manager with industry body the World Gold Council.
“Even at around $700 gold is higher than it was about two years ago,” Wozniak said. “Gold has been keenly sought after, reflecting its perception as a safe haven and store of value. There is no risk of it being affected by defaults.” Wozniak added that the strong buying by investors in gold as a safe haven had been offset by speculative investors taking profits.
“A significant proportion of this selling has reflected gold’s better performance relative to other assets,” Wozniak said. “These investors bought gold as their insurance policy and, during times of significant market turmoil and large falls in asset prices, have been able to make a claim against that policy.” US gold futures for December delivery on Friday settled up $37.50, or 5.3 percent, to $742.50 an ounce on the COMEX division of the New York Mercantile Exchange. Spot gold closed up at $743.35 on Friday. Jewellery sales in the United States had tapered off as consumer spending thinned due to the financial crisis, but investment in gold bullion was healthy, Wozniak said.
