Kyodo Securities – Gold Down But Not Out…

“Kyodo Securities”: despite suffering its biggest one-day fall, gold is still the best protection.

“Kyodo Securities”, the Asia-based boutique broker, has advised clients against selling their holdings of gold despite the metal suffering its biggest one-day fall in well over a year.

The price of gold fell by more than $50 on Thursday following worse than expected economic data coming out of the United States. The fall came on the same day as the Dow Jones industrial average lost some 270 points off the investors became more concerned at sovereign debt default issues in the euro zone.

A source close to “Kyodo Securities” said that although many investors are fleeing to the perceived safety of the US dollar, ultimately gold will provide the most effective protection against government profligacy in the months ahead.

The source pointed to speculation that central banks in general will be forced to continue to provide support for their economies in light of the fact that they have already spent trillions of dollars in an effort to boost economic growth and that this would require a return to the quantitative easing that has proven so controversial in the investment community.

“Kyodo Securities” analysts believe that gold may return to retest $1000 per ounce during the course of the current selloff but they suggest that this provides investors with a perfect opportunity to protect their wealth against what it expects to be a concerted effort by central banks to inject more liquidity into the moribund economies.