Egypt's SCZONE eyes deeper investment, port digitalisation ties with Singapore    Egypt's gold prices slip slightly on July 28th    Egypt's Housing Min. reviews HDP marketing plan    Indian Embassy to launch cultural festival in Assiut, film fest in Cairo    Egypt, South Africa pledge to deepen development cooperation at G20 meeting    Egypt's PM orders road maintenance review, tougher penalties to curb accidents    Egypt, Novartis explore expanding collaboration in oncology, cardiology    Egyptian aid convoy heads toward Gaza as humanitarian crisis deepens    EU, China agree on rare earths, climate but divisions remain on trade, Ukraine    Association of Real Estate Developers seeks urgent meeting over threatened land deallocation on Northwest Coast    Midar partners with Adeer to develop Boulevard project in Mostakbal City with EGP 70bn investment    Iran launches mass deportation of Afghans amid spying allegations    Over 60 million visits recorded under Egypt's Women's Health Initiative since 2019    Culture minister launches national plan to revive film industry, modernise cinematic assets    Thailand, Cambodia clash on new front as tens of thousands flee    Sudan's ambassador to Egypt holds reconstruction talks on with Arab League    I won't trade my identity to please market: Douzi    Egypt welcomes 25-nation statement urging end to Gaza war    Sisi sends letter to Nigerian president affirming strategic ties    Egypt, Senegal sign pharma MoU to unify regulatory standards    Two militants killed in foiled plot to revive 'Hasm' operations: Interior ministry    Egypt, Somalia discuss closer environmental cooperation    Egypt foils terrorist plot, kills two militants linked to Hasm group    Egypt's EHA, Huawei discuss enhanced digital health    Foreign, housing ministers discuss Egypt's role in African development push    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Investors' cash grab shreds gold's safe-haven status

LONDON: Investors' dash for cash has overwhelmed gold's traditional status as a haven from risk, putting the metal on course for its first quarterly fall since end-September 2008, when the global credit crunch was at its worst.
Investors said gold could continue its slide through to the end of 2011 as they liquidate positions in a scramble for dollars at the end of a difficult year, with the euro zone debt crisis causing money markets to seize up.
"We are sitting on quite a lot of cash, I think a lot of people are," said Rupert Caldecott, chief investment officer of the asset allocation team at Dalton Strategic Partnership, which has a total of around $2.4 billion under management.
"With so many assets declining daily in value, cash has its merits. The bond markets are offering no help. The problem with safe havens is that they have proven not to be safe at all and the list is getting shorter. It may only be cash very shortly."
Gold made a tentative bounce on Thursday after falling 3.5 percent on Wednesday, but was still hovering near a 2/1-2 month low, and it may take months for the metal to recover.
Comfortable
Investors' recent tendency to hold cash, rather than hard assets, has become more evident as the end of the year approaches.
The most recent Reuters asset allocation poll showed global portfolio managers held more cash in November than at any time during at least the last seven years, another of the factors undermining gold's safe-haven properties recently.
"In a period of liquidity contraction and severe distress, investors need to raise cash and gold prices suffer," said Sabine Schels, head of fundamental commodity research at Bank of America Merrill Lynch.
"We saw that in 2008/2009 after the collapse of Lehman Brothers."
A resurgent dollar against the euro has also proved a headwind to gold, with the euro near an 11-month low to the US currency.
A stronger dollar often encourages non-US holders of gold to sell the metal to lock in a higher profit in their own currencies.
"At the moment gold is moving in tandem with the euro and in the short-term currencies will continue to be the main driver for gold," said Ross Norman of Sharps Pixley. "It's all about the US dollar."
"If at the start of the new year we see great strength I think that will be deeply encouraging for gold bulls for the remainder of 2012 but the first few weeks will be key."
The bulls may return
Some investors said the sell-off could be exaggerated and they still like gold, which is shown by the resilience of holdings of the metal in exchange-traded funds (ETF), which remain near record highs.
"We see no let-up in the investor interest in gold. ETF inflows have continued to hold up and there is a need for emerging central banks to diversify their reserves into gold," Schels said.
Global holdings of gold in the major exchange-traded funds tracked by Reuters remain above 70 million ounces, close to this month's record 70.148 million ounces, as inflows into European funds offset outflows from large US products such as the SPDR Gold Trust, the world's biggest gold-backed ETF.
Although the gold price is suffering from investors' desire for the safety of cash, the risk that this $116 billion stash of bullion could be jettisoned is slight, analysts say.
"We remain bullish on the long-term outlook for gold and comfortable with the relatively modest position that we currently hold for the time being," Charles Morris, head of absolute return, HSBC Global Asset Management, said in a note. –Additional reporting by Amanda Cooper, Harpreet Bhala and Natsuko Waki


Clic here to read the story from its source.