-- Posted Wednesday, 20 May 2009 | | Source: GoldSeek.com

Gold demand soared 38% to 1015.5 tonnes in the first quarter of 2009 according to The World Gold Council's "Gold Demand Trends" report. A combination of factors including diversification, safe haven buying and inflation hedge demand are attributed with the upsurge. However, George Milling-Stanley, the Managing Director of the WGC also cites the global shift in sentiment from "capital appreciation to wealth preservation."

Rumours that the Russian Central Bank may allow Russian banks to pledge gold as collateral are also circulating the market. Such a move should further increase the appetite for gold among financial institutions as its attractiveness as collateral outshines the traditional bonds in the eyes of the regulatory forces.

Overnight gold continued higher and is trading now at the upper end of the $915 -$935 range. Surprisingly weak housing data released from the US contributed to a continued weakening of the dollar against all currencies.

Currently trading at $930, a break above $935 would target the next short term resistance levels at $945 and then $965. Short term support remains at $915.

Silver continues to benefit also from dollar weakness as it tracks gold higher, currently trading at $14.20.

(Irish Office) Gold and Silver Investments Limited 63 Fitzwilliam Square Dublin 2, Ireland T:+ 353 1 6325011 F:+ 353 1 6619664 Web: www.gold.ie

(UK Office) Gold and Silver Investments Limited No. 1 Cornhill London, EC3V 3ND, UK T:+ 44 (0) 207 060 4653 F:+ 44 (0) 207 8770708 Web: www.goldassets.co.uk

-- Posted Wednesday, 20 May 2009 | Digg This Article | Source: GoldSeek.com

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