By Paul Ploumis 18 Jun 2015 Last updated at 04:03:51 GMT
(Kitco News) - Commodity analysts at Capital Economics warn investors to not underestimate the impact a Greek default will have on financial markets.
They do admit that gold hasn’t benefited from safe-haven flows as a result of higher expectations that Greece will fail to come up with a new bailout agreement with it’s creditors.
"However, we continue to think that a further escalation of the Greek crisis would be positive for gold. While a Greek default alone may no longer be a huge surprise, if the uncertainty undermines investor confidence in the rest of the region, the gold price is likely to climb much further,” they say.
"Government bond yields in Portugal… have only just started to rise from historic lows. Further contagion fears are likely to pull the gold price higher.”
Courtesy: Kitco News