HSBC analyst: Demand for gold is returning
A senior figure at HSBC claimed yesterday (November 4th) that demand for gold may have begun its recovery after the recent bout of selling.
Gold prices fell to a 13-month low of $680.80 per ounce in late October as investors looked to cash in and pay off stock market losses, but it has since bounced by seven per cent.
Now James Smith, chief commodity analyst with the bank, has explained that a number of recent economic factors appear to be playing into the hands of gold.
He said: "A recovery of oil prices due to the Saudi (output) cut, a more optimistic equity outlook and easier credit have certainly triggered demand for gold."
Mr. Smith's views were echoed recently by Alex Wallenwein from Market Oracle, who explained that a number of bullion dealers have been short of gold supplies for some time.
Such a trend is mainly linked to the nervousness surrounding the long-term effects of the credit crisis and the $700 billion rescue plan issued by the US government.
"Real investors in real gold are enjoying their shopping spree - except that the spree turned into a treasure hunt as the shelves and display cases of gold dealers look more and more like the supermarket shelves in the old Soviet Union - bare," said Mr. Wallenwein.
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