-- Posted Tuesday, 3 January 2012 | | Disqus

Sale prices for gold and silver brought out the bargain hunters with gold and silver both gaining more than two per cent in value, bringing to an end the sell-off that closed last year.

New Year cheer for bullion was predicted in the ArabianMoney newsletter with specific ideas for precious metal investments over the course of 2012 (sign-up here).

Prices rebound

We see this far more as a rebound from oversold price levels with hedge funds keen to get back into this asset class than a response to some bellicose statements from Iran or for that matter the new leadership in North Korea.

Gold and silver’s fundamental appeal has not lost its shine. Indeed, the money printing by global central banks is lining precious metals up for some huge advances in the near future.

The problem that still lies close at hand is a likely sell-off of all asset classes in a financial crisis centred on the eurozone. It is only too easy in the haze of the return to work after the New Year to forget that this crisis is very near.

Watch the yields on Italian bonds this week for further evidence that this crisis is coming to a head and not getting any better. The good German industrial output figures reflected the boost from euro devaluation in the crisis, not fundamental strength.

Going forward

So the prospect for gold and silver is a recovery from the bombed out levels of the end of 2011 which rather tarnished an otherwise extremely good year for these metals with new record highs for both gold and silver.

Will these metals reach these highs again before succumbing to the downdraft of a eurozone crash? It is always possible. That kind of fundamental demand might also ensure that the levels of the end of last year are not revisited in a crash.

But this does leave a red letter warning over gold and silver in the first quarter.

-- Posted Tuesday, 3 January 2012 | Digg This Article

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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