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Gold Trades in Narrow Range Despite Supply Shortfalls

Commodities / Gold & Silver Sep 09, 2008 - 06:14 AM GMT

By: Mark_OByrne

Commodities After initial falls, gold has rallied in morning trade in London as the dollar has given up some of its recent sharp gains. Gold's rise comes despite the further  fall in oil prices but gold remains firmly in its recent narrow range between $780 and $840.

The disconnect between the leveraged futures market and the physical bullion market continues with many wholesalers and retailers finding it hard to source and supply bullion coins and bars in the U.S. and internationally. This is particularly the case with silver bullion coins and bars (all bars except 1000 ozt silver bars are becoming difficult to source) in the U.S. and with gold bars in Asia. Gold Investments is continuing to be able to supply our clientele with all their physical bullion needs without delays but only through an extensive network of wholesale suppliers internationally.

Reuters quotes a bullion dealer in Singapore. "Demand from our regular customers such as India, Indonesia and Thailand is still there. There's a shortage of physical bars in this region, which also helps support premiums."

Gold remains taboo in most financial and economic commentary
Much of the financial and business press still fails to grasp the magnitude of the current crisis and Pollyanna, delusional analysis remains the order of the day in large part. Gold and silver bullion remain the preserve of the smart money. This smart money which has been ahead of the curve and realised the extent of the problems facing the U.S. financial system and hence global economy, remains a tiny fraction of the international investment community.

Gold remains taboo in most of the financial and economic community – it is largely ignored and when it is occasionally covered it is often done so in an unbalanced and biased fashion by non experts who know little or nothing about the supply and demand fundamentals and the other very strong fundamentals driving the market. The media and investors remain obsessed with equity markets and wrongly assume that a one day stock market rally signifies some form of return to economic health.

Gold is the elephant  in the room and blurts out unpleasant truths about our current global financial and monetary system. Unpleasant truths that most commentators do not have the courage to face.

Many if not most investment “experts” and economists still regard gold as a “useless commodity” or a “speculative commodity” (akin to pork bellies) rather than the finite, safe haven currency it remains and will increasingly become in the coming recession or Depression.

The mainstream majority remains oblivious and  is still buying increasingly risky stocks including financial stocks as witnessed yesterday. Unfortunately, ignorance will not be bliss for the clueless and complacent as the global economic crisis continues to deepen and real wealth preservation again becomes of paramount importance.

Today's Data and Influence
Markets await US data on housing later today with the release of the National Association of Realtors Pending Home Sales for July. Economists expect a 1.0 percent decline compared with a 5.3 percent rise the previous month.

Gold and Silver
Gold is trading at $803.60/804.10 per ounce (1200 GMT).
Silver is trading at $12.09/12.15 per ounce (1200 GMT).

Platinum is trading at $1296/1306 per ounce (1200 GMT).
Palladium is trading at $250/266 per ounce (1200 GMT).

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ph +353 1 6325010
Fax  +353 1 6619664
Gold and Silver Investments Limited
No. 1 Cornhill
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne Archive

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