-- Posted Monday, 11 June 2007 | Digg This Article
We're seeing a bit of a bounce back this morning in prices because we believe the sell off to finish last week was too pronounced. What we've also seen in the wake of the 5% sell off last week are a number of pronouncements that the precious metals bull market is over and done with, sell it all and move on.
While the chasm between technical trading factors and actual market fundamentals is continuing to grow, we feel very comfortable that the fundamental factors will eventually win the day and force prices higher. We're also ardent believers that the current commodity bull market will be a decade, or possibly longer, in duration and bailing out before there is a clear indication the run is finished is simply a guess at when to market time investments. The supply side market fundamentals are getting more bullish by the day and we're getting news about the demand component continuing to improve at the same time.
Most economic news (CPI and PPI figures) are coming out later in the week, so we should continue in this range bound $650-670 area until those reports begin hitting the tape.
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Dubai's second quarter gold imports to surge on strong regional demand
Reuters
Dubai: Demand from Saudi Arabia and Egypt is expected to boost Dubai's gold imports in the second quarter, Dubai traders and industry officials said yesterday.
Dubai is a centre for the import and re-export of gold, bringing in 489 tonnes of gold in 2006 and exporting 274 tonnes, according to the Dubai Multi Commodities Exchange (DMCC).
"Dubai's gold imports in the second quarter will be higher than the first quarter of 2007 and higher than the first quarter of last year," said Moaz Barakat, managing director of the World Gold Council in the Middle East, Turkey and Pakistan.
"Demand from countries like Egypt and Saudi Arabia for Dubai gold is increasing and the city is increasing its imports to meet this demand," he told Reuters.
Dubai's first quarter gold imports rose to 132 tonnes, up 14.8 per cent compared with the same period last year, while exports fell 23.3 per cent to 66 tonnes, the DMCC said.
Gold demand in Saudi Arabia rose 6.9 per cent to 26 tonnes in the first quarter of 2007, while in Egypt, the most populous Arab country, it jumped 15.4 per cent to 15.7 tonnes, the World Gold Council has said.
"Demand for Dubai gold is becoming ... huge and more gold is getting into the city which has succeeded in truly becoming the world's city of gold," said Tawhid Abdullah, managing director of the city's Gold and Jewellery Group.
Total value of gold traded through the city during the first quarter was $4.08 billion, up from $3.588 billion during the first quarter of last year.
Local traders said that recent high gold prices had not affected the appetite for Dubai's gold.
"People are fine with the current price levels and they do not mind paying more as long as they are getting the best designs and the best quality, which are the traits of Dubai gold," a trader said.
"Countries like Egypt, Saudi Arabia who have historic gold markets, are asking for our gold and many jewellers here have opened shops in these countries."
In Egypt, where residents once considered gold the skin of the gods and lavished it on their ancient pharaohs as they passed to the afterlife, many women only buy Dubai-branded jewellery from small shops on Al Sagha Street - Cairo's equivalent to Old Bond Street in London.
"Most women here would not like the traditional piece of gold jewellery. We want to wear something fancy, trendy and unusual, which you can find in pieces that come from Dubai," 33-year-old gold shopper Halima Madeh said.
Spot gold bullion peaked at $730 an ounce in May 2006, its highest level since a record peak above $800 in 1980. Prices now stand at around $658 an ounce, a 27 per cent rise since the start of 2006.
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Blanchard and Company, Inc. is the largest and most respected retailer of American rare coins and precious metals in the United States, serving more than 450,000 people with expert consultation and assistance in the acquisition of American numismatic rarities and gold, silver and platinum bullion. The Blanchard Economic Research Unit is a key source of precious metals market analysis and continues to be an important resource for financial and consumer media throughout the United States. Blanchard and its predecessor companies have called the New Orleans area home for more than 30 years. For more information about the company, visit www.BlanchardGold.com
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