-- Posted Thursday, 12 March 2009 | | Source: GoldSeek.com
Gold and silver rallied over 1% and 2% yesterday as stock markets barely made gains in the US. Asian stock markets were mixed but the Nikkei fell 2.5% and most European markets are showing weakness again this morning and gold remains firm.
Demand for gold remains extremely robust with broad based demand from both retail and pension investors but also now from very large players such as high net worth individuals, hedge funds, sovereign wealth funds (Government of Singapore Investment Corp - GIC) and central banks diversifying into gold.
The world's central banks were net buyers of an estimated 1.1 million oz in January. Ecuador and Russia appear to have been the main buyers. Despite much signals of intent from the Chinese, there are no records of them buying gold yet (at least not through conventional transparent channels).
Reuters reports that huge flows of institutional money is flowing into money market funds and into the precious metals of silver and platinum and particularly gold (this demand is being manifest in both ETFs and into actual physical bullion in Swiss allocated accounts which we offer).
CPM, the metals consultancy said that “those central banks that have been selling gold for much of the past two decades have sold most of what they wanted to sell. Others are buying small volumes, and considering larger purchases, in the face of the financial crises and currency market volatility they have faced over the past year."
Demand for gold is so large that world mining supply will find it extremely difficult to cope with the demand resulting in much higher prices. The world’s largest gold ETF, GLD has purchased in the first two months of the year more than 65% of all annual global gold mine production. World central banks have bought the equivalent of more than 20%. This means that some 85% of the annual world gold mine production was bought by just four identifiable entities so far this year.
This would suggest that the weakness seen on the COMEX is again to do with leveraged speculators with short term horizons, some of whom are manipulating the price for their own nefarious purposes. Regulators were quick to clamp down on the short sellers in the stock markets but seem remarkably reluctant to tackle possible manipulation in the precious metal markets.
As ever leveraged paper players can do considerable technical damage and be successful in their machinations in the short term but the fundamental and divine laws of supply and demand will ultimately, as they always so, dictate prices.
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.
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.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC 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, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.
