30 November 2010, 9:03 a.m.
By Allen Sykora
Of Kitco News
(Kitco News) — Gold has shown an ability to hold up as a hedge during European debt issues this year, says Standard Bank. Parallels have been drawn between current European debt problems and those seen with Greece in the April-July period. Standard studied the reaction of commodities to euro weakness in April-July. “On average, commodity prices have fallen much more on euro weakness than they have rallied higher on euro strength between April and July this year,” Standard says. The exception was gold, which increased on euro weakness, confirming its status as a hedge against credit risk, Standard says. “We believe gold is set to do so again.”
