American Bullion -- Rely On Physical Gold As Your Safe Haven Investment

Friday, June 11, 2010 at 04:59am

June 11, 2010, Los Angeles – The price of Gold closed slightly lower on Thursday as the euro advanced for a third straight day. The euro’s three day gain against the dollar brought it to an almost one week high.

The European Central Bank increased its forecast of the currency region’s economy from around a 0.8 per cent increase to around a 1 per cent increase in 2010. It is now expected to grow only about 1.2 per cent in 2011, much lower than an earlier projection of around 1.5 per cent because of weaker domestic demand.

Analysts have said that the $1 trillion dollar aid package from the European Union and International Monetary Fund may help delay a Greek default but may not stop it. They said it may give Spain, Italy and possibly even Portugal time to correct their finances thereby averting a wider contagion.

Thomas Mayer, Deutsche Bank AG’s London based chief economist said Greece’s debt will likely prove to be unsustainable. “Deficit reduction alone doesn’t solve the debt issue,” Mayer said in a telephone interview.

He estimates that Greece's debt will rise from 120 per cent of gross domestic product to 150 per cent due to the country's austerity program. “Hardly anyone I know believes they can carry it out and still not restructure. This is basically the expectation across all asset classes.”

Investors and analysts agree that Greece’s financial crisis presents an opportunity for a political and economic overhaul by Prime Minister George Papandreou. Failure to do so could threaten default and a possible collapse of the euro.

“Papandreou has a window,” said Loukas Tsoukalis, an economist at Athens University. “If he proves he can deliver the goods, and that the situation is changing, not just in terms of the budget, but the reality in Greece is changing, then he has a great chance of success.”

Investors hope he's right. When faced with the uncertainty that currently exists in the global economies, rely on physical Gold as your safe haven investment.