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The Price Of Gold Went Through The Roof

Todays Date: December 16, 2018

Most of the economists thought that because of the financial crisis in Greece, the demand for the yellow metal will fall. The good news is that the precious metal just hit a new four-month high after Standard & Poor’s, the rating agency, has lowered Greece’s and Portugal’s credit ratings.

In sterling points this actually means that, gold hit a new record of 767 pounds. The problem that arises from this is that Greece will no longer have vital access to European Central Bank funds. Furthermore, some investors will not be able to buy Greece’s debt anymore.

After Portugal’s downgrade, the price of gold rose significantly from 1.145 dollars an ounce to 1.172,60 dollars an ounce. This rise was important when expressed in dollars but it was even better seen in all other currencies, except the yen. The Japanese currency is strong even if there are serious concerns about the country’s fiscal position. Equities and commodities, including oil and cooper, did very well on the market in the past few days. This is also comes as a result of the downgrades that have managed to convince the investors to come out of riskier assets. Because gold is considered to be a safe haven, it was one of the few commodities that is on the rise

In only one day, the world’s largest gold-backed exchange-traded fund is said to have increased its holdings to a new record of 1.146,83 metric tons of gold. The downgrade also affected the value of the FTSE 100 Index and the New York’s Dow Jones industrial average fell 1.9 pc while the Japan’s Nikkei 250 was down by 2.5 pc.

Gold has and will be a serious investment and this is why investors like having this asset in their portfolio. Economists don’t cease to advise us to invest in the precious metal and they have good reasons for doing so.

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