Gold’s current state makes the average investor take pause and consider the wisdom of this as an investment class. This is mind boggling with the current volatility in the markets & the debt crisis in Europe and the U.S. Then yesterday, the Fed Chair Ben Bernanke told Congress he is prepared to do what ever is needed to avoid a double dip recession.
All of these are good for the long term of gold.The environment for gold is still kind of perfect, Ronald Stoeferle, gold analyst at Erste Group told CNBC. We have negative real interest rates more or less all over the world, there’s extreme systemic risk, and there is a very fundamental need for a safe-haven currency. Gold is one of the few investments that fits the bill as a long term safe haven and is real currency.
Gold will continue in the short term to have some potential for more movement beyond the traditional safe-haven position. The long term fundamentals are as solid as they have been for the last decade. We’re still up (16.5 percent) in 2011. Compared to the equity markets, that’s a pretty nice out-performance, Stoeferle further added on CNBC Corrections like this are healthy for the long-term uptrend.