Gold lures wealthy investors, central bankers expand stimulus

By Roger Baettig | September 22 2012 6:07 PM

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High-net-worth individuals are buying Gold to protect their wealth from the risk of rising inflation after central banks boosted stimulus, according to Deutsche Bank AG’s (NYSE:DB) asset and wealth-management unit.

Gold has historically been considered to be a store of value and an inflation hedge and increasingly it is being utilized as a monetary instrument. There is a growing interest among the wealthy investors to gain exposure with an increased preference for physical holdings.

Gold is in the 12th year of a Bull run, 13.5% higher this year, as investors seek to hedge against weaker currencies and the threat of rising consumer prices.

Holdings in Gold- backed exchange-traded products expanded to an all-time high yesterday, and Bank of America Corp. (NYSE:BAC) and Deutsche Bank are among banks forecasting that the price will rally to a new records.

The movements by the central banks globally in the last few weeks has focused considerable investor concern as to the long-term effects of the liquidity infusions, As a result of that, private clients are concerned about the possible future effects of inflation and the means of hedging that risk.

Immediate-delivery Gold reached 1,779.50 oz on 19 September, the highest price since February, after central banks took further steps to bolster their economies hurt by Europe’s debt crisis.

The precious Yellow metal reached a record $1,921.15 on 6 September 2011, gained 0.4% to 1,774.85 at 5:30 p.m. in Singapore Friday.

Paul A. Ebeling, Jnr.Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.