(1888PressRelease) October 20, 2011 - MIAMI, FL - It seems as if there is no happy ending to the European debt crisis and the effect on gold has been the opposite to what one would expect. As the preferred safe haven, gold should normally be rising in price when there is disappointing news about the state of the economy, whether at home or abroad. One is forced to wonder why the market is responding in a way that appears to be counterintuitive.
Another unusual scenario has been that the precious metals market, and especially gold, has moved in correlation with stocks and equities. Again, we would normally expect the opposite to be true. One suggestion is that fears concerning the global economy are persuading investors to liquidate; certainly, every time the euro falls on further disappointing news about the problems in the euro zone, the dollar gains and this does make gold more expensive for buyers outside of the United States.
The fundamentals underpinning gold have not changed. Governments print more and more money, at a frightening rate, but supplies of gold are finite. Additionally, historically speaking and allowing for inflation, gold is actually cheap. Most market analysts expect gold to rise; traditionally, gold prices rally strongly towards the end of the year and there is no reason to assume this year will be different. Physical demand also remains strong.
"The market is behaving in an unusual fashion at the moment," says Bill Hionas of Pan American Metals of Miami. "The correlation between gold and the stocks and equities market is bucking the normal trend; additionally, we should be seeing more safe-haven demand in light of the current macroeconomic uncertainty."
Gold has proven itself repeatedly as a tried and tested safe haven for wealth protection. Given the current situation, one can only assume that, when the dust settles, we will see a significant rise in the price of gold.
About us:
Pan American Metals of Miami, LLC is a group of traders, investors and account executives that combines many years of experience to help clients invest in bullion. PAMM provides an individual investment service and is based in Miami, Florida for convenient access to both North and South American investors.
Debbie Bailey
Executive Administrator
Pan American Metals of Miami, LLC
Email: dbailey ( @ ) investpanam dot com
Website: http://www.panamericanmetalsofmiami.com
Fundamentals underpinning gold are strong. 
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