Gold is still expensive, but rising economic risks and market turmoil mean investors should buy it for insurance, Deutsche Bank said Friday. The recovery since the global and European financial crises had put the price of gold under some pressure. The yellow metal, which some analysts view as a safe haven or as a protection against rising inflation, typically underperforms during periods when the economy is growing or inflation is low. However, in a note issued Friday, the German Bank said economic signs are pointing in gold’s favor.
“There are rising stresses in the global financial system; in particular the rising risk of a U.S. corporate default cycle and the risk of a sharp one-off renminbi devaluation due to the sharp increase in China’s capital outflows,” Deutsche Bank added.”Buying some gold as ‘insurance’ is warranted.” READ MORE
