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-- Posted Sunday, 2 May 2010 | Digg This Article | | Source: GoldSeek.com
Gold and silver prices rallied sharply yesterday to close the week at $1,179 and $18.69 while US stocks fell by the most since January with the the Dow jones off 158 points at 11,008 and the S&P off 50 points at 1,186. Chartists see gold on its way back to the high of $1,226 set earlier this year and for silver to pass $20 an ounce again. The performance of precious metals in this sell-off could be very different from late 2008 when gold and silver prices also fell dramatically. Bonds in trouble The reason is simply that investor confidence in the bond market is not what it was then. Just look at the government debt crisis in Europe right now. That leaves precious metals. Silver with its traditional leverage to a rising gold price is the top pick to capitalize on this market volatility. Silver did not disappoint yesterday, rising in value by twice the percentage of gold. So what happens next? It is always tough to try to call a crisis like the Greek debt situation. Will the IMF and ECB step in like Abu Dhabi did with Dubai last December, or will it take much longer to find a solution, keeping markets unstable? We don’t know. But we do know that Greece is not the only euro zone country with a serious debt problem. Spain is much bigger at 580 million euros and yesterday it lost its triple-A credit rating, a major blow to any sovereign nation. Then there is Portugal, Italy and Ireland. On the other side of the Atlantic markets are just waking up to the contagion effect, mainly a stronger dollar that is bad for multinational profits and exports. Things are already not looking great for the over-hyped US financial sector with Goldman Sachs being investigated for possible criminal charges and a pending Citi stock issue likely to flood the market. Safe havens Investors looking for a safe haven can choose precious metals, US dollars or US treasuries. However, if nothing else the problems in euro sovereign bonds are a reminder that government debt is not always as safe as it looks. Diversification into precious metals is therefore a reasonable response, and as these markets are very tight on the supply side, demand will push prices higher and higher. ArabianMoney editor Peter Cooper’s book ‘Dubai Sabbatical: The Road to $5,000 Gold’ is selling well on Amazon.com and looks more likely to be proven correct by the day.
-- Posted Sunday, 2 May 2010 | 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 and Silver Prices Jump as Stocks Start Big Sell-Off
