Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why Gold Price is Up, The Smart Money Is Still In

Commodities / Gold and Silver 2013 Apr 29, 2013 - 03:59 PM GMT

By: Money_Morning

Commodities

Tony Daltorio writes: It's been a good few days for investors holding on to gold, and we've been getting lots of questions as to why gold prices are up this week.

Gold futures had their biggest one-day gain of the year Thursday, up nearly $40 an ounce, and ended the week up 4.2% at $1,453.60.


At one point this week, gold had retraced half the loss it incurred during its April nosedive. In a two-day period, the yellow metal fell $225 an ounce, hitting a two-year low on April 15.

It is natural for any financial asset to enjoy some sort of a rebound after such a steep plunge. But there are some sound fundamental reasons as to why gold is up.

Here are four.

Why Gold Prices Are Up Reason #1: Asia's Gold Rush
As discussed in previous articles at Money Morning, one of the biggest reasons for the bounce in gold prices was the unexpectedly strong demand for physical gold around the world.

Long-term investors, particularly in Asia, considered the drop in gold prices a gift from the short sellers on Wall Street.

Sales at Australia's Perth Mint doubled after the two-day gold price tumble. The China Gold Association reported retail gold purchases tripled across China in that time frame. Japanese consumers were net buyers of gold for the first time in eight years.

The buying led to huge premiums to the quoted London gold price across Asia's physical gold markets - pushing premiums to 15-month highs.

In addition, gold shipments to India - traditionally the world's biggest buyer of gold - were at record levels. Shipments this past week to India doubled from the prior week.

Why Gold Prices Are Up Reason #2: Buying Frenzy for U.S. Gold Coins
Physical demand was readily apparent here in the United States as well.

The U.S. Mint reported that sales of gold coins were at the highest level since December 2009. As of April 24, the Mint had sold 196,500 ounces of gold coins - the best level since 231,500 ounces of gold coins were sold in December 2009. Sales in March were a mere 62,000 ounces.

Remarkably, the U.S. Mint ran out of its smallest gold coin, weighing one-tenth of an ounce, and forced to suspend sales.

Why Gold Prices Are Up Reason #3: Central Banks Lead the Charge
Another reason behind gold's strength this week was continued support from central bank purchases.

The World Gold Council says that central banks bought the most gold in 48 years last year, adding 534.6 metric tons to reserves. The WGC expects that central banks this year will add between 450 and 550 metric tons to reserves.

The main drivers here are emerging market central banks, which are seeking to diversify away from the U.S. dollar. For example, according to the International Monetary Fund, both Russia and Turkey added to their gold reserves in March.

Money Morning Chief Investment Strategist Keith Fitz-Gerald believes that the world's central banks will add more gold to their reserves in 2013 than they did in 2012, led by emerging markets.

Why Gold Prices Are Up Reason #4: The Smart Money Is Still In
Finally, the really smart money is not being scared out of gold by Wall Street's short sellers.

Billionaire investor John Paulson is staying the course. John Reade, a partner at Paulson & Co., said that despite more expected short-term fluctuations in the price of gold, his firm will not veer off its thesis about gold and money printing by the Federal Reserve.

Famed investor Jim Rogers shared a similar outlook in an exclusive interview with Money Morning on April 21.

Rogers told Money Morning gold must go higher longer-term because of the massive global money printing. He added that once gold does bottom, the precious metal will enjoy another multi-year bull market.

Go here to check out what else Rogers shared about gold prices, U.S. stocks, and investing ideas for 2013.

Source :http://moneymorning.com/2013/04/26/why-gold-prices-are-up-this-week/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 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