Gold price to climb as fears of a ‘Grexit’ rise

16-Jun (Sydney Morning Herald) — The price of gold is tipped to rise as investors use the precious metal as a hedge against financial fallout from Greece’s ongoing debt crisis.

Gold has been trading at about $US1180 per ounce in the last week, and between $US1170 and $US1210 per ounce for months, despite a strengthening US dollar.

However, the price could climb as investors attempt to mitigate the risks of a possible Greek exit from the eurozone if the country defaults on its debt mountain.

“We are only just starting to see signs of contagion from Greece to other bond and equity markets in the eurozone,” Capital Economics analysts said in a note to investors.

“A Greek default alone may no longer be a huge surprise and the sums involved would be small in the global scheme of things. However, if the uncertainty undermines investor confidence in the rest of the region, the gold price is likely to climb a lot further.”

[source]