are gold certificates safe or physicial better, page-9

Troubles put a shine on gold

Traditionally the safest of safe havens, gold now also has the attraction of being a hedge against a weak dollar. Which could easily arise if the Paulson plan fails, with a renewed crisis in the financial system, or if it succeeds, as the burden of US Treasury debt takes its toll on taxpayers and the wider economy.

So, gold seems a one-way bet. Mark Byrne, director of Gold and Silver Investments, says: "Retail demand is extremely robust as evidenced in shortages of gold and silver in the US, India and in east Asia. The world's largest gold refinery, Rand, in South Africa, was cleared out of their entire inventory of krugerrands in one order by an anonymous Swiss institution."

Goldman Sachs and Citigroup are said to be especially keen goldbugs, as is the Bundesbank, the world's second-largest holder of gold after the US Federal Reserve.

Some say the Chinese Treasury, which has US$1.8 trillion (NZD$2.63 trillion) of US dollar assets and less than 1 per cent of its currency reserves in gold, may warm to the yellow metal.

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