American Bullion -- The Safe Haven Security Of Physical Gold

Thursday, June 10, 2010 at 05:18am

June 10, 2010, Los Angeles – The price of Gold closed lower on profit taking as the dollar weakened and the euro rose on Wednesday. With on-going debt problems rattling the euro zone, investors are increasing their purchases of Gold coins and Gold bars as a hedge against diminishing currency values.

"Gold is consolidating before testing higher again. The main drive is still the equity markets. If equities stabilise, then it might put pressure on the metal," said a dealer in Hong Kong. "But sentiment is still bullish because of gold's unique safe-haven status."

Reuters reported on Wednesday that China's exports during May will show a 50 per cent increase over the year. The report has prompted optimism that the world's economies are improving and they may show increasing strength in upcoming months.

At the European Central Bank's monthly meeting on Thursday, economists are expecting the ECB to continue their record low interest rates of 1.0 per cent. The ECB's explanation of its recent shift in bond buying is expected to dominate the day’s discussions.

"This meeting will be the first occasion for the ECB to properly communicate on its bond purchase programme, and it comes at a particularly critical moment," said Nomura economist Laurent Bilke.

"The market is clearly questioning the determination of the Eurosystem now, as country spreads are back to their widest in some cases -- Spain, most noticeably."

Stuart Frost, currency specialist at Threadneedle, says continued weakness in the euro currency will make European export stocks an attractive investment for foreign investors.

"Weakness in the currency makes European manufactures in the export sector more competitive, against the US dollar, Swiss franc, Japanese yen and Canadian and Australian dollars," Frost says. If you're looking for safety in your investments, opt for the safe haven security of physical Gold.