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-- Posted Sunday, 26 April 2009 | Digg This Article | | Source: GoldSeek.com
Gold finished the week up 5.1 per cent at $913 while silver jumped 8.4 per cent to $12.90 as precious metals became a safe haven from the faltering six-week old bear market rally. This left gold prices at their highest levels for three weeks but fell short of a third break of the $1,000 barrier. However, the precious metals clearly established their position as the place to be as the bear market rally breaks down. Bull about the bear Now showing a precocious 28 per cent gain in six weeks the stock market rally is facing strong headwinds in the upcoming bankruptcy of two top US auto companies, a commercial property slump, a deteriorating international financial environment, and general over-optimism about recovery prospects in the banking sector. Last week the Wall Street pundits did their very best to keep the rally going despite some deeply unimpressive results from bell weather stocks like UPS and 3M. Results that came in slightly less worse than analysts own forecasts were greeted as returning prodigal sons. This is of course nonsense and spin of an obvious kind. Nobody really wants to be seen to be rocking the boat as the US establishment led by President Obama attempts to talk up the market. The problem is that fundamentals always triumph over hot air. It is like trying to blame the media for the troubles of the world: if only they stopped reporting events then they would go away. Reality counts Sadly reality has a life of its own. The US banking sector has a long and painful recovery path to come but most crucially has not hit the bottom yet. Ask Meredith Whitney, the analyst that first downgraded Citi at the start of the crisis. And what about the executives at Chrysler and General Motors who are busy preparing to file for bankruptcy? This is a sign that things are still getting worse, not better. Global trade is also firmly in a slump. Japanese exports in March slumped by 47 per cent instead of 49 per cent, and if that is an improvement worth shouting about then this correspondent is from Mars! Reality will bring investors back to the conclusion that with the money supply being inflated by an unprecedented amount the only safe havens are precious metals, and that is what we started to see last week.
-- Posted Sunday, 26 April 2009 | 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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Gold Up Sharply As Bear Market Rally Fades
