The weakness of Us dollars in the market has make precious metals especially gold, are expected to act as a safe haven for investors in the medium or long terms. In the recent credit crunch, the weakness in the Us dollar has been a vital factor leading people to invest in gold as investors used gold to hedge risk independently of the dollar movement.
Gold is used to hedge against the volatile securities markets. The gold market recorded its largest gain , especially after the recent world crises in the credit market and after the Sept 11 incident in America. The fall of the price of precious metals ( GOLD ) are also due to the fall in global supply in 2007.The drop of gold dropped 3.0% year on year to 3,469. Another reason of the rise in gold price are due to the demand by mant respective countries.