With the greenback rallying, Gold’s appeal as an alternative investment continues to erode. The precious metal remains rangebound or slightly under pressure as investors seem torn between an optimistic global economic recovery, and pessimistic credit woes. Last week gold fell below the psychological support level of $1,100 per troy/oz to a six-week low of $1,094.50/pt-oz, losing grip of a record high above $1,226 pt-oz hit on December 3. But despite its recent decline, gold will continue to serve as an investors’ “insurance policy” in 2010, Rachel Benepe, portfolio manager of five-star rated First Eagle Gold Fund, told CNBC on Tuesday.
Benepe said she still believes gold will be a solid investment in the new year.
“I think the need for insurance is as real today as it was a year ago,” she said.
Benepe also said that with governments around the globe tentatively withdrawing stimulus funds from their countries’ fragile economies, gold will serve as a safe harbor.
“In case something does go wrong and there’s unintended consequences, we feel gold will act as insurance for those events,” she said.
