American Bullion -- Physical Gold Is The Safest Hedge

Wednesday, June 02, 2010 at 06:00am

June 2, 2010 Los Angeles – Gold bullion prices rallied 1 per cent as the euro dropped to a four year low against the dollar on Tuesday. Investors, worried about euro zone debt contagion spreading beyond Greece, are diversifying their investment holdings into Gold bullion at an increasing pace.

The European Central Bank warned on Monday that euro zone banks are facing 195 billion euros in bad debts over the next 18 months. A news report on the slowdown in the Chinese manufacturing sector spurred safe haven buying in gold as global stock markets plunged 2 per cent on Tuesday.

"Gold has seen a very strong move to the upside from the lows around $1,170 in late May. People on Main Street are buying more gold bars, coins and ETFs. There is a lot of momentum," said Peter McGuire, managing director of CWA Global Markets.

"We could see $1,265 this month as we grind higher and there are geopolitical tensions that could send things far higher -- Korea, Israel and Iran." There appear to be several reasons for Gold bullion prices to continue rising, geopolitical and economic reasons are among them.

The torpedo attack on the warship Cheonan in March has become a top campaign issue in the South Korean elections taking place on Wednesday. President Lee Myung-bak's liberal opponents are accusing him of provoking tension with impoverished North Korea for political gain.

Lee is holding North Korea accountable, for the 46 dead South Korean sailors killed in the attack, after a team of investigators found North Korea was behind the firing of the torpedo. Polls show Lee's stand against North Korea has kept his support ratings around the 50 percent mark in recent weeks. During unstable political and economic climates, physical Gold is the safest hedge. Buy Gold bullion in bars and coins today.