What if buyers of real Gold are on strike? Arabianbusiness.com reported on 9 March that in Abu Dhabi February sales volume of precious metals was off by 20% . Commodity News for Tomorrow, on 4 March, reported that India's imports of Gold in February were 11 tons, down 81% from year ago. India, per the same article, has not imported Silver since October, and may reexport 700 tons plus sell 300 tons of domestic Silver production. Turkey's importation of Gold for jewelry in February was down 30%. Yet the paper Gold market continues to march upward while cash buyers are turning away from Gold due to price. Speculative funds have become the heart of the market on the belief that someone else will  provide them a profit. The Federal Reserve's expansion of targeted lending to $400 billion might mean that this approach may be preferred to broad interest rate cuts. Market participants, especially dollar bashers, may be disappointed next week by the size of any U.S. rate cut. While the longer term target for Gold is approaching US$1,500, some skepticism in the short term may be appropriate.

GOLD THOUGHTS come from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report, monthly, and Trading Thoughts, weekly. To receive copies of recent reports, use this link http://home.att.net/~nwschmidt/Order_Gold_EMonthlyTT.html

-- Posted Wednesday, 12 March 2008 | Digg This Article