The price of gold rises, the EU area is scary

The Gold Rush marked the movement of the whole community of global investors, with prices of yellow metal, which rose to just under $ 1,800 for ounce on fears that France could lose its rating level. Gold is regarded as a safe haven, since it is a hedge against the economic and political risks because it tends to retain its value better than stocks or other assets.



French President Nicolas Sarkozy has interrupted a vacation to hold a cabinet meeting unscheduled where the government has said it would consider tax increases, spending cuts and other fiscal measures to support the country's fiscal position.



But concerns remain that the European financial system. If he will still have other problems of sovereign debt, which are initiated by small economies such as Greece and Ireland, the same could also spread in the major economies such as Spain, Italy and France.



Greece is smaller than Italy, Spain and France. The main reason why there is an increase in the gold price is because of the nervousness caused by Europe. People are trying to preserve their wealth and do not see many other options except gold.



Gold was also a record during the last week, before and after the U.S. reached an agreement last minute to increase their debt ceiling, then even after the unprecedented decision taken by Standard & Poor's of to downgrade the U.S. debt. However, while gold prices are rising fast, the risk of a sharp pullback is increasing. For this reason, should be careful who wants to invest in yellow metal in the coming weeks, as you might find to buy at the wrong time.