Gold to Extend Gains as Investors Seek Haven

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Gold prices, rallying for an eleventh year, will extend gains as investors add bullion seeking a haven against currency debasement and inflation, according to India's Quantum Asset Management Co.

"There will be more people moving towards the safety of gold which will take gold prices much higher," Chirag Mehta, a fund manager at Quantum Asset Management, which runs one of India's 11 bullion-backed funds, or ETFs, said in an interview in Mumbai. "The gradual increase in gold price will continue."

Gold for immediate delivery rallied to a record $1,577.57 on May 2 spurred by concern about faster inflation, Europe's debt crisis and a weakening dollar. Prices have advanced 7.4 percent this year, after climbing the past 10 years, the longest run of gains in at least nine decades in London.

"The diversification to gold will continue, gold is still under-owned," Mehta said yesterday. "Even if a small fraction of financial assets move to gold, I think the price will go much higher than what it is currently."

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