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article imageRecord-high gold trading reflects concerns of Euro-zone economy

By Gordon K. Chan     May 12, 2010 in Business
Gold trading reaches record highs as investors perceive the precious metal as a safe haven amidst the uncertainty and skepticism of the euro-zone currency bailout.
Gold continues to be the place where unsure investors want to store value.
The metal has hit record trading prices; seen in e-trading, gold posted a price of $1,245.40, the highest price ever for an active gold contract, reports the Wall Street Journal.
The high price reflects the concern that investors have over the long-term efficacy in managing euro-zone debt and the perceived risk that is posed by a single currency.
Ongoing debt issues in Greece, Spain and Portugal, combined with a $1 trillion rescue package issued by the European Union continue to be observed as a risky environment and placing money in a refuge investment such as gold appears to be a sure bet.
Further, the bailout is intended to function as a stimulus and investors worry that encouraged spending will spark inflation. The rising price of gold will stymie this effect and work as an inflation hedge.
The active trading of gold produced positive gains for Canadian stock markets.
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