A golden safe haven

Gold continues to glitter for three very good reasons, says Nicholas Snowdon, Deutsche Bank’s Metals Analyst at Deutsche Bank Research – a low interest rate environment, a record period for bonds yielding below flat, and low inflation.

“Geopolitical events support safe haven buying and this creates a strong environment for gold investor demand,” he explains.

Obviously when there is a commodity that everyone likes there will be period when positioning is stretched and there will be corrections – bouts of instability do fade and prices could come off. But, says Nick, these should be viewed as buying opportunities. After all, supply is hardly going to increase given that gold mine capex has been constrained for the past five eyars.

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