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Gold Soars to $1027 on Bear Stearns Collapse

Commodities / Gold & Silver Mar 17, 2008 - 11:51 AM GMT

By: Mark_OByrne

Commodities

The London AM Gold Fix at 1030 GMT this morning was at $1023.50,  £508.45 and €649.51  (up from $997.00, £491.617 and €641.158 Friday).

We are at new record nominal highs in gold in most major currencies and gold has surged through £500 per ounce (GBP) with sterling falling significantly against major currencies especially the euro (0.79).


With financial markets under massive pressure with the Bearn Stearns collapse and significant and increasing systemic risk, gold has again surged in price (and rose as high as $1,027.20). The path of least resistance is clearly to the upside as unfortunately, financial and economic news continues to deteriorate by the day.

The financial system itself is under siege and it is no exaggeration that this is akin to the much clichéd “perfect financial storm”. Besides the Bear Stearns collapse, oil has surged to a new record high ($111.80) and the dollar has fallen against the majority of currencies and a new record low against the euro (1.5882).

The Federal Reserve overnight cut the discount rate for banks by 25 basis points to 3.25 per cent and created a new lending facility for other financial institutions in an attempt to boost market liquidity. However, as we have been pointing out for some weeks now – this is no longer a liquidity issue rather a solvency and systemic issue.

Given the extent of increasing macroeconomic and systemic risk, our forecasts of gold surpassing its inflation adjusted high of $2,300 per ounce in the coming years look conservative indeed. Especially as gold remains the preserve of the smart money with the vast majority of the public of the western world remaining blissfully unaware of the importance of real diversification and of investing in gold.

17-Mar-08 Last 1 Month YTD 1 Year 5 Year
Gold $   1,024.15
13.53%
22.90%
56.91%
203.90%
Silver       20.97
22.81%
41.94%
60.03%
371.12%
Oil      110.32
15.28%
11.24%
93.17%
215.83%
FTSE       5,488
-5.17%
-14.70%
-10.47%
47.44%
Nikkei      11,788
-13.47%
-22.99%
-29.60%
49.74%
S&P 500       1,288
-4.58%
-12.27%
-7.12%
49.30%
ISEQ
-11.44%
-17.27%
-37.83%
47.22%
EUR/USD      1.5795
7.60%
8.29%
18.66%
48.77%
© 2008 GoldandSilverInvestments.com


Support and Resistance
Gold's support is now at $960. Resistance is at today's new record nominal high of $1027.

Silver

Silver is trading at $20.80/20.84 at 1200GMT.

PGMs

Platinum is trading at $2010/2020 (1200GMT).
Palladium is trading at $488/494 per ounce (1200GMT). 


Happy St Patrick's Day !

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold Investments
Tower 42, Level 7
25 Old Broad Street
London
EC2N 1HN
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@www.goldassets.co.uk
Web www.goldassets.co.uk

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 www.financialregulator.ie 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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