Gold Could Very Well See Its Recent Gains Continue

With investors becoming even more risk adverse and this coupled with the knowledge that the US trillion dollar (and counting) deficit is weakening the dollar further, gold could very well see its recent gains continue. At the same time, gold has remained very stable in other currencies reinforcing its attractiveness as a currency hedge.

Further bad news to blight the path of the dollar and an economic resurgence, is rising US treasury yields. This affects mortgage interest rates which in turn would slow any adolescent recovery.

In other news, General Motors [[GM] is teetering on the brink of bankruptcy as political manoeuvring intensified over its European plants. A number of European countries, who have an interest in the fate of company, are growing increasingly angry at Germany’s role as the country that decides who will buy the ailing automotive giant. Belgium’s Prime Minister, Herman Van Rompuy wrote to the European Commission asking it to ensure that the decision would be fair to all European countries involved.

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