Tuesday, 22nd January 2008 (1866 views)

As stock markets suffered the biggest one-day fall since 9/11, analysts have said gold remains a barrier against uncertain economic activity.

Carlos Sanchez of market analyst CPM Group told Newsday that the high price of gold reflects demand from hedge funds, banks and investment funds who are looking to protect themselves against a volatile financial market.

Meanwhile British financial analyst Jeff Randall, writing in the Telegraph, says gold has been "a store of value for more than 5,000 years" and remains a "safe haven in troubled times".

Financial commentator Peter Burshre said: "Regardless of the dollar price involved, one ounce of gold would purchase a good quality man's suit at the conclusion of the Revolutionary War, the Civil War, the presidency of Franklin Roosevelt and today."

And, with rising oil prices, higher inflation and mounting fears of a US recession amid sliding stock markets around the globe, more investors may look to gold as a buffer against economic turbulence.

 

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