Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
Corona Virus Wuhan Global Pandemic 2020 Deaths Forecast and Market Consequences - 28th Jan 20
Palladium Surges above $2,400. Is It Sustainable? - 27th Jan 20
THIS ONE THING Will Tell Us When the Bubble Economy Is Bursting… - 27th Jan 20
Stock Market, Gold Black Swan Event Begins - 27th Jan 20
This Will Signal A Massive Gold Stocks Rally - 27th Jan 20
US Presidential Cycle Stock Market Trend Forecast 2020 - 27th Jan 20
Stock Market Correction Review - 26th Jan 20
The Wuhan Wipeout – Could It Happen? - 26th Jan 20
JOHNSON & JOHNSON (JNJ) Big Pharama AI Mega-trend Investing 2020 - 25th Jan 20
Experts See Opportunity in Ratios of Gold to Silver and Platinum - 25th Jan 20
Gold/Silver Ratio, SPX, Yield Curve and a Story to Tell - 25th Jan 20
Germany Starts War on Gold  - 25th Jan 20
Gold Mining Stocks Valuations - 25th Jan 20
Three Upside and One Downside Risk for Gold - 25th Jan 20
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold "Readmitted as Prudent" Investment, Gains vs. Falling Dollar

Commodities / Gold and Silver 2011 Jan 19, 2011 - 08:05 AM GMT

By: Adrian_Ash

Commodities

WHOLESALE PRICES for gold bullion rose versus the US Dollar in Asia and London trade on Wednesday, recovering almost one-third of this year's 4.5% loss but holding flat once again vs. other major currencies.

European stock markets ticked lower, while government bonds and commodities both rose.


The German finance ministry said today it "roundly rebuts" claims in weekly magazine Die Zeit that Berlin wants a restructuring of Greek government debt, with bondholders forced to take losses.

"In the medium term, we remain cautious on gold until it demonstrates strength against equities, which also pay dividends," said HSBC Global Asset Managements Charles Morris to Bloomberg earlier.

Between Oct. and end-Dec., Morris's Absolute Returns fund halved its 12% allocation to gold investment, he confirmed.

But "After a lengthy absence, [other] asset managers and central bankers are readmitting gold back into the group of prudent asset classes," writes Thomas Kaplan, chairman of New York's Tigris Financial advisory and asset-management group, in today's Financial Times.

Says Kaplan, the global financial crisis has reminded portfolio managers that gold bullion "is the only major financial asset that does not represent someone else's obligation to repay."

Over in wholesale silver bullion dealing, meantime, London's professional market continued to suffer "noticeable tightness " according to one dealer, "exacerbated" on Wednesday morning by "several reports of difficulty sourcing physical silver and short-dated borrowing."

Silver investment demand from private investors has already led to record monthly sales at the US Mint, according to one analysis.

Users of low-cost online exchange Bullion Vault have raised their physical silver bullion holdings by 11% so far this month.

The giant iShares Silver ETF Trust fund, in contrast, has continued to shed metal, with fund managers and other investors selling 3% of their net position between New Year and last night.

Ahead of next month's Chinese New Year celebrations, "Demand for silver is [also] strong in China," says Walter de Wet in Standard Bank's Commodity Daily, noting last month's $1-per-ounce premium in Shanghai over benchmark London prices.

Compounded by falling Chinese exports and rising Indian demand, however, "On a relative basis, we believe silver looks overvalued not only to gold, but also relative to [other industrial] metals such as palladium and copper...which also have much tighter underlying fundamentals."

Standard Bank's analysts "do not suggest shorting silver" because of low global interest rates on cash savings. But "we would not be surprised to see a sharp correction in the metal price – especially if the Dollar finds marginal strength."

Wednesday's declining Dollar saw the silver price jump to 4-session highs above $29.50 per ounce, even as it held flat against other major currncies.

Priced against the British Pound – now trading at new 8-week highs on the forex market – gold bullion held flat for the third session running early Wednesday at £858 per ounce.

Eurozone investors looking to buy gold today also saw prices hold unchanged, as the single currency rose to 2-month highs above $1.35.

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules