• 16 hours Russian Prestige And American Politics: The COVID Vaccine Race
  • 18 hours Is The Silver Rally Over Or Just Getting Started?
  • 2 days Alibaba-Backed Tesla Competitor Set To IPO In The U.S.
  • 2 days Emerging Economies Could Get Left Behind In Race For COVID Vaccine
  • 2 days Dead Malls Could Be Amazon’s Next Target
  • 3 days Unpacking Biden's Energy Plan
  • 3 days Russia Aims To Become World's Top Gold Producer
  • 3 days Global Tech Stocks On Edge Over Trump TikTok Ban
  • 4 days Cobalt Squeeze Threatens The Electric Vehicle Boom
  • 4 days COVID Has Sparked A Surge In Cybercrime
  • 5 days Precious Metals Bulls Still Have Plenty Of Room To Run
  • 5 days The U.S. Has The Tech To Go Green, But Will It Use It?
  • 6 days Massive Losses Force Russian Commodities Giant To Slash Dividends
  • 6 days Markets Up On Stimulus Hope
  • 7 days UK To Invest In Europe's First Geothermal Lithium Recovery Plant
  • 7 days TikTok Takes Center Stage In US-China Tech War
  • 8 days Are Semiconductor Stocks Overvalued?
  • 8 days Jobs Report Doesn’t Say Much Amid COVID Uncertainty
  • 9 days Crypto FOMO Heats Up As Bitcoin Climbs Above $11,000
  • 10 days Aluminum Is Bouncing Back In China
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Gold Investments

Gold Investments

Gold Investments

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…

Contact Author

  1. Home
  2. Markets
  3. Other

Gold Investments Market Update

Gold

Gold surged to $912.30 in New York yesterday and was up $32.70; silver closed at $17.12, up 64 cents.

Gold surged in what was the largest one day move since 1985 as the dollar weakened, oil prices surged to new record highs and stock markets fell sharply. While gold was up some 3%, most U.S. stock indices were down some 3% and this continued in Asia and early European trading with gold rising to over $920. Although European indices have recovered somewhat as the morning has progressed, gold has continued to remain firm and safe haven demand has reemerged on decreasing risk appetite.

Next resistance for gold is at $934 and $953 and it looks increasingly like the recent consolidation may be over with very strong support now seen at $850. Given the confluence of so many bearish factors for bond and equity markets, we remain firm in our belief that gold will reach our 2008 prediction of $1,200 per ounce before the end of 2008.

Barclays Joins RBC in Severe Warning and RBC and Russians Diversify into Gold

We appear to be about to embark in a period of increasing turbulence and instability in financial markets which will result in higher gold prices due to its safe haven characteristics. Now Barclays have joined Royal Bank of Scotland in issuing a severe investment warning.

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the U.S. Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall "below zero".

Tim Bond, the bank's chief equity strategist said that we are now in 'a nasty environment.... There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth."

Gold is primarily an asset of wealth preservation, and large institutions are coming to realise this again. The Royal Bank of Scotland has given gold a 25 per cent weighting in its latest investment fund targetted at expatriate customers. Performance is weighted equally across four sectors: emerging equities, developed equities, property and gold.

Yesterday came news that Russia's oil funds may invest in gold. Moscow-based agency RIA Novosti said, citing a finance ministry official. Russia's Reserve Fund and the National Wellbeing Fund were worth a combined $161.9 billion on June 1. The Russian central bank along with the Chinese and other 'emerging' market, second tier central banks has been increasing its gold bullion reserves in recent months.

As more institutions, sovereign wealth funds and central banks increasingly diversify into gold, we will see gold rise to multiples of its current price as it is such a tiny marketplace when compared to the size of equity, bond and currency markets.

Today's Data and Influences

Commerce Department data due out Friday is personal income, personal consumption and PCE inflation (which bizarrely excludes 'volatile' food and energy components). The only release of note today in the UK is the current account deficit which is expected to widen to 12.5 billion pounds.

Silver

Silver is trading at $17.54/17.60 per ounce (1230 GMT).

PGMs

Platinum is trading at $2062/2069 per ounce (1230 GMT).
Palladium is trading at $466/470 per ounce (1230 GMT).

 

Back to homepage

Leave a comment

Leave a comment