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-- Posted Monday, 29 June 2009 | Digg This Article | | Source: GoldSeek.com
Summer is not traditionally a good time for gold prices but this year could be the first exception in this bull market. Much depends on how stock markets fare from here. If there is a sharp correction then that would rally the dollar and take gold prices down, at least for a month or two. 
If, on the other hand, the stock market rally continues over the summer then gold prices are likely to gain traction and surpass $1,000 an ounce again. Wall Street has shown some signs of hesitation over the past two weeks, and a sell-off followed by a sideways move over the summer can not be ruled out. Inflation expectationsThe contrary force is from the green shoots’ school and what appears to be stimulus money inflating commodity prices. This two-way pull most likely means gold prices are unlikely to dip far from current levels, while the future upside is very much intact with further global financial turbulence probable, according to no lesser source than the Bank of England. That might be viewed as a no-lose buying argument for precious metals. Certainly the resilience and relative stability of the gold price over the past difficult year has won new investors over to this traditional safe haven asset. In the Arab World there has been a flight to gold, and the level of enquiries now being reported by bullion dealers suggests that a much bigger wave of buying is coming up. Arabian moneyThese are the very professional investors who ought to be about to sink their funds back into global equities in advance of a global economic recovery. But they may well decide to hedge against cost-push inflation by buying hard assets rather than companies with an uncertain profit outlook, at least for the short to medium term. Certainly the news about the 6.9 per cent US savings rate, the highest in 16 years, counsels against an investment strategy that relies on the US consumer to drive asset values forward. The US consumer is repairing tattered balance sheets and accumulating cash, and that is not going to produce the kind of recovery assumed by green shoot optimists. However, Arab gold buyers are clearly sitting on the sidelines hoping for a buying opportunity and a price dip this summer. They might get it but as the days go on the prospects of a meaningful dip in the gold price are diminishing, and gold might beat the summer doldrums this year.
-- Posted Monday, 29 June 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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Will Gold Beat The Summer Doldrums This Year?
