-- Posted Wednesday, 5 December 2007 | Digg This Article | Source: GoldSeek.com
Gold Gold was up $12.90 to $801.10 per ounce in New York yesterday and silver was up 20 cents to $14.27 per ounce. Gold has traded sideways in a range between $800 and $808 in Asian and early European trading and is trading at $803.50/804.00 per ounce at 1200 GMT.
Gold is showing strength in pounds sterling and euro at £394 GBP (up from £384) and €546 EUR (up from €539). The recent record highs on November 7th (London AM fix) at $841.75 (USD), £400.47 (GBP) and €573.55 (EUR) will likely be surpassed in the near future - probably early in the New Year. However, given the speed at which the UK and U.S. housing, property and credit markets are deteriorating it would not be surprising if gold surpassed its recent record highs before year end on safe haven demand. There is now strong support at the recent lows at $775 per ounce and there could be range trading consolidation between $775 and $845 prior to challenging the record 1980 high.
The dollar has again weakened and oil has rallied back above $90 a barrel which is supportive of gold.
The smart money continues to move into gold. Some of the richest men in Russia and the world are taking major positions in the gold industry. The richest man in Russia and one of the richest in the world is believed to be in the early stages of building a substantial gold business.
The Telegraph reports that Chelsea football club owner Roman Abramovich has followed in the footsteps of fellow Russian billionaires with a move into gold. Russia's richest businessman has paid £200m for a 40pc stake in Aim-listed explorer Highland Mining - which established a firm foothold in Russia when it bought a gold mine from Mr Abramovich in 2002. The Russian joins a elite club of his compatriots who have been investing in gold after making their fortunes from oil, gas, and other metals. Last month steel billionaire Alexei Mordashov bought Britain's Celtic Resources. Mikhail Fridman has set up a gold company, and Oleg Deripaska is expanding his investments in the precious metal. Another four men, all among Russia's richest 10 people, have major gold assets.
One banker said Mr Abramovich wanted to use Highland Gold's London listing as a vehicle for building a substantial gold business. More acquisitions are expected to follow.
Henry Horne, managing director of Highland, believes the dip in price is just a "cyclical thing". Despite the recent fall, gold prices have risen 26pc this year. Mr Horne said yesterday: "I'm very bullish on gold. There is a huge upside because demand will continue to outstrip supply." Barrick's chief executive, Gregory Wilkins, speaking at an RBC Capital Markets conference in London last month, said the price "could easily move to $900, $1,000 or beyond. It could happen very quickly."
The Russian State news agency, Ria Novosti said that the gold price is surging due to "the growing demand for all raw materials, the weakening of the dollar and instability in Western credit markets. Under these circumstances, the majority of investors prefer to put their money in gold, which has eternal value."
Silver Silver is trading at $14.33/35 at 1200 GMT.
PGMs Platinum was trading at $1468/1474 (1200 GMT). Spot palladium was trading at $346/352 an ounce (1200 GMT).
Oil World oil prices rose nearly 2% to above $90 a barrel. OPEC are already pumping at full capacity and finding it hard to meet the huge increase in global demand. Oil prices are unlikely to fall significantly unless there is a significant global recession which creates demand destruction. While the western world could well be on the verge of such a recession, China, India, Russia, Brazil and other emerging markets look like they may be able continue growing and thus demand for oil may remain high creating a stagflationary 1970s experience.
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