Wednesday, June 26th 02:32 PM IST

Gold remains best wealth protection tool

# gold demand  # debt crisis  # wealth protection tool  

Gold has slumped into a bear market after 12 annual gains and its decline has shattered the confidence of those people who thought prices would climb indefinitely.

NEW DELHI(BullionStreet):As major banks and financial institutions continued to paint a dismal picture for gold this year, some analysts still bats for gold for its ability to remain as the best tool for wealth protection.

They said gold's safe haven appeal cannot be deleted permanently,despite the metal extended its drop this year to 23 percent, as long as global economy remained volatile with lingering European sovereign debt crisis to top the list.

Gold has slumped into a bear market after 12 annual gains and its decline has shattered the confidence of those people who thought prices would climb indefinitely.

Some analysts however said gold remained the best solution against the backdrop of debt distress and fiscal pitfalls in the world and particularly in Europe.

Analysts said with inflationary pressures on the rise again and the dollar set to weaken after a two-month surge, the stars are aligned for a rebound in the precious metals just as investor sentiment plumbs new depths.

Besides, A pause in equities rally and lower prices attracting buyers could help gold prices climb up on spot and futures markets in near future,they added.

They added that though India's anti-gold measures could create a temporary setback initially, world's top producer China continued to support gold by making investing in the precious metal easier.

Global central banks continue to amass gold reserves, which now became a big influencing factor for the yellow metal.

Meanwhile, China's mining association expect a ten percent increase in 2013 gold output for the world's largest producer. CMA executive vice chairman Wang Jiahua said China's output may rise to as much as 440 metric tons.

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