Gold Spot gold was trading at $657.50/658.00 an ounce as of 1215 GMT.
Spot gold has continued to trade sideways and remains in an extremely tight range for the last four days between $653 and $660 and in a range between $648 to $675 since the start of August. There is very strong support at the 65 week moving average at $644. Gold has remained above the 65 week moving average since the inception of the bull market in 2001, as seen in the chart below.
Gold is strongly supported by increasing physical demand from a variety of sources including record global gold jewellery demand, increasing demand from the Indian sub-continent and also the StreetTRACKS ETF and other ETFs (see below).
- Global demand for gold jewellery in the second quarter of 2007 has reached a record $14.5 bn mark, a very significant 37% more than the corresponding period of 2006, according to figures released by the World Gold Council (WGC). Demand was particularly strong in China, Russia and the Middle East and Gulf countries which saw demand rise by 32%, 27% and 21% respectively.
- Demand in the subcontinent has remained robust in the down season and we are now entering the wedding season when demand is normally far higher than usual. Indian ex-duty premiums were $3.92 on the PM fix yesterday, the rupee remains strong at R41.00 to the USD and the Indian stock market has sold off less than most international stock markets. The 'wealth effect' is growing in India with the emergence of a huge middle class which is bullish for gold.
- Finally, ETF demand for gold has continued to grow and has likely increased with the recent market volatility. Gold held by StreetTRACKS Gold Shares, the world's largest bullion ETF, surged to a record level at 514.21 tons as of Monday, compared with about 507 tons on Friday. Investors tend to buy gold ETFs to diversify their assets and ETF investors tended to hold on to the funds unlike speculators in futures markets because gold was used as an alternative investment to balance their portfolios against volatility in other financial markets. That is a very significant increase in one week and shows that investment demand for physical bullion is increasing.
Credit Crisis Fears regarding the US housing/mortgage and hedge fund/credit derivatives nexus remain the key focus. While Tokyo stocks were flat overnight most stock markets in Asia and Europe have rallied but we are a long way from being out of the woods yet and investors should and will likely remain nervous of riskier assets.
The Dow Jones also ended in negative territory despite the growing speculation of a near term rate cut from the Fed continues to build. Expectations of a move to lower the Fed funds rate after Bernanke told the Chairman of the Senate Banking Committee that the central bank would use “all available tools” to calm financial markets. However, Friday’s move to cut the discount rate seems to have done little to settle market nerves. Treasury Secretary, Paulson, said on CNBC that the President's Working Group on Financial Markets had been 'reenergised' and that the turmoil "will extract a penalty on the growth rate" of the US economy.
Silver Spot silver is trading at $11.63/11.65 an ounce (1215 GMT). While technically silver is now very damaged, the fundamentals on silver are as strong as ever and this will likely be seen as one more volatile sell off in a multi year secular bull market.
PGMs Platinum was trading at $1233/1238 (1215 GMT). Spot palladium was trading at $320/325 an ounce (1215 GMT).
Currencies, the USD and Gold The euro and the pound were both higher against the US dollar on Wednesday as global stock markets remained stable in spite of a worldwide credit crunch. The Euro bought US$1.3489 in morning European trading, up from the US$1.3468 it bought in New York late Tuesday after US Treasury Secretary Henry Paulson insisted the US would get safely through the credit crisis. The British pound rose to US$1.9838 from US$1.9822, even as sentiment gained that the Bank of England may leave its benchmark interest rate unchanged at 5.75 percent when it meets next month.
Oil Oil prices recovered slightly in early London trade after yesterday's sell off when fears Hurricane Dean would damage oil installations in Mexico eased.
Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252. Registered for VAT under number 6397252A. Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator
Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors’ interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.
All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.
Fair Use Notice: This newsletter contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of issues of financial and economic significance. At all times we credit and attribute the copywrite owner and publication.
We believe this constitutes a 'fair use' of any such copyrighted material as provided for in Copyright Law. The material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for economic research purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.
Gold Investments Tower 42, Level 7 25 Old Broad Street London EC2N 1HN United Kingdom Ph +44 (0) 207 0604653 Fax +44 (0) 207 8770708 Email info@goldinvestments.org Web www.goldinvestments.org
Mission Statement Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth. We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.
Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Disclaimer
The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com,
is strictly prohibited. In no event shall GoldSeek.com or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.
OilSeek.com
