Recent debt concerns in Europe are causing chaos in the currency markets
. With debt concerns in Greece, Portugal and Spain, the European market is reeling with uncertainty about the ability of these economies to repay their debts. Gold is the ideal hedge against default risks, and by nature, there is no currency risk with precious metals. Uncertainty creates chaos and investors with exposure should look for places to protect their investments. The concern over how Greece and other countries in the European Union will pay their debt has helped increase the demand for Gold as a safe haven.
Concern over the fiscal health of smaller European economies has boosted gold and put pressure on the euro this year. When there is chaos in the currency markets people look for quality investments. Gold is proving once again it can protect against uncertainties and it has always been known for quality. Even as both Greece and Portugal's credit ratings were downgraded by Standard & Poors, spot Gold prices went higher. Seeing the gold market rise, even when equities are down, points to a change in people's perception of gold as a commodity. A very impressive shift has taken place in the gold market as it is again known as one of the highest quality investment instruments.
Many think that the European Union (EU) situation combined with a commitment to sustain low rates in the US is laying the groundwork for inflation ahead. With more debt problems in Europe, we at Gold Vault Metals believe it is likely the gold market will continue to have a very positive track ahead.