Tan Yaling, President of China Foreign Exchange Investment Research Institute, predicted that 2012 may present potential risks in three areas of the international financial market: First, there are risks to the Euro and a crisis is imminent. Greece or Germany may opt out, which may lead to higher Euro risks and a further crisis. Second, oil price hikes may lead to severe inflation and an economic crisis would be inevitable. Third, fluctuations is the price of gold will be unpredictable and there will be an increase in speculative moves in the gold market. While the price of gold may continue to rise, severe drops may occur. The price of gold is a double-edged sword. It may protect the dollar and the U.S. but the U.S. may also be forced to sell gold in order to save itself.
Source: Xinhua, January 24, 2012