"Gold has traditionally been used as a safe haven in times of economic and political uncertainty, as the metal's intrinsic value is not dependent on any paper currency."
And so it begins...
It will not be easy or straightforward.
New York Times
Gold Hits Record High In Euros, Pound
By Michael Taylor and Jan Harvey
Published: March 2, 2010
NEW YORK (Reuters) - Gold rallied to a six-week high in dollar terms and hit record highs versus the pound and the euro on Tuesday, as uncertainty about Greece's debt and Britain's politics lifted demand for bullion as a hard asset.Uncertainty over plans to tackle Greece's fiscal crisis and over what the next British election may mean for UK debt have heightened volatility in the European currencies, lifting interest in gold as an alternative asset, analysts said.
"Currency volatility is by far the biggest factor supporting gold on Tuesday," said Frank McGhee, head precious metals trader at Chicago-based Integrated Brokerage Services.
Gold has traditionally been used as a safe haven in times of economic and political uncertainty, as the metal's intrinsic value is not dependent on any paper currency...
Euro-denominated gold hit a record high of 836.72 euros an ounce, up from 823.66 euros late on Monday, while gold priced in sterling touched a record 759.86 pounds an ounce, up from 744.85 pounds.
"Gold denominated in euros has definitely outperformed the drop in euro-dollar by almost 1 percent in the last 10 days," said Mitsubishi Corp precious metals strategist Tom Kendall. "That does reflect some nervousness about stability of sovereign debt, and stability of the euro itself."
The euro rebounded from a 9-1/2-month low against the dollar as investors awaited new plans to address Greece's debt crisis.Greek Prime Minister George Papandreou said his country was fighting for survival against bankruptcy and urged civil servants and pensioners to accept sacrifices to save the debt-burdened nation.
Fears over the fiscal health of peripheral euro zone economies have weighed heavily on the euro so far this year, knocking it down by more than 5.5 percent against the dollar.
STERLING GOLD HITS HIGH
Sterling-denominated gold rose as the British currency was driven lower by fears that the next UK general election could result in a hung parliament.
That could mean an incoming government would struggle to take the action necessary to reduce debt, analysts said.
"Markets fear the UK government will be forced to create more sterling in order to buy their own government bonds and that quantitative easing and debt monetization may continue for longer than expected," and that could lead to further gains in gold, bullion dealer GoldCore said in a note..."
