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-- Posted Monday, 24 November 2008 | Digg This Article | Source: GoldSeek.com
Saudi Arabian investors look set to emerge as the biggest buyers of gold and silver shares in the coming week as the leverage that these stocks offer to rising gold and silver prices becomes increasingly attractive. The revelation of a $3.5 billion purchase of gold bullion by a group of Saudi investors about a month ago has stunned the precious metals community. But this came as the venerable old Perth Mint said it could no longer cope with demand and closed its doors to all new sales until January. Both are highly significant developments in the normally quiet world of precious metals and suggest that something much bigger is afoot and that serious price increases are almost upon us. Indeed, gold leapt $50 in late trading last Friday, or almost seven per cent. What lies ahead this week? Comex conundrumIt does not need a genius to see that physical buying of precious metals is rocketing while the price is strangely depressed. The answer to this conundrum is the importance of the Comex futures market in setting the gold price. In this paper market hedge funds have been net sellers, and that has been keeping the price down. Now hedge funds are coming to the end of their selling, and the change in direction for precious metals is likely to be dramatic. There is no doubt about the true level of demand for the tightly supplied physical precious metals market. Gold and silver stocks jumped sharply in late trading last Friday, with a gain of 30 per cent for a pure silver bell weather stock like Pan American Silver. Stock rally imminentLet us not forget that the reverse leverage to the gold and silver price - which has taken their stock prices down to 40-year lows this year, will now act in the opposite direction. Gold and silver shares are going to have their biggest rally in 40 years if the metal prices recover suddenly. That is why the brightest investors in the Persian Gulf are loading up with these stocks, and the biggest price increases will come among the most depressed of these shares, namely the pure silver producers. The more intelligent investors will also be looking at gold junior stocks whose knocked down share prices are an absolute steal at these levels, and will doubtless make anybody buying now extremely rich in a short time.
-- Posted Monday, 24 November 2008 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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Will the Saudis buy gold and silver shares next?
