Friday, July 18, 2008

Gold gains on inflation concerns

Following historical trends, gold rose on speculation that the slowing economy in the US and their higher inflation will create a rise in demand for gold as an asset of value. Silver, on the other hand fell. Gold reached an all-time high of $US1,033.90 an ounce on March 17.

"Gold is acting as an alternative investment, big time,'' said Ron Goodis, a futures-trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. "People are liquidating across all asset classes, and they're looking for a place where it's safe. We could see a situation where a lot of commodities go down, but gold takes off. Gold is a fear trade.''

Gold futures for August delivery rose $US8, or 0.8%, to $US970.70 an ounce on the Comex division of the New York Mercantile Exchange. The metal has climbed in six of the past seven sessions

Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, jumped 7.2% last week to an all-time high of 705.9 metric tons on July 11, topping the previous record of 663.8 tons on March 17. The fund dropped to 701.9 tons on July 14 and has remained unchanged this week. Gold peaked in March when the Federal Reserve helped broker a deal for JPMorgan Chase & Co. to buy Bear Stearns Cos

"Gold rose on the fear in the financial system,'' said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. "The fear may have eased, but it hasn't evaporated. Fear will come back sooner rather than later. There's a tremendous bid on gold on these breaks.'

Gold may rise to $US1,500 in the next six months as investors wait out the turmoil in financial markets

We are the only refiner in the world offering our services to the general public. We process our own material which allows us to give you the best price possible!
Order your FREE Refiner's Pack today at!

No comments:

Post a Comment