Gold News

Gold Bullion Ignored & Dismissed by Western Media Near Record Highs; Indian's Post-Harvest Gold Buying "Set to Be Strong"

Gold Bullion rose back above $1250 an ounce for the second time this week on Thursday morning in London, as government bonds ticked lower together with energy prices.

Base metals and soft commodities rose. Silver Prices touched a new 16-week high at $19.57 an ounce.

"[Media] coverage of the fact that gold is at near-record highs is muted," notes the professional Platts newswire.

Asian stock markets meantime closed Thursday 1.5% higher. But European shares stalled after Wall Street closed last night with its fourth-best one-day gain of 2010-to-date on what one London analyst called a "rather selective" reading of Wednesday's global economic data.

UK house prices today showed their second month-on-month drop in a row, while British manufacturing also contracted.

Swiss GDP growth jumped however to 3.4% annually, and the 16-nation Eurozone also grew faster than expected, with GDP rising by 1.9% year-on-year to end-June.

Inflation in Eurozone factory-input prices jumped from 3.0% to 4.0% per year in July.

Today the European Central Bank voted to keep its key interest rate on hold at 1.0% for the 16th month running.

Sterling and the Euro both fell vs. the Dollar, nudging the price of Gold Bullion up to £812 an ounce and €31,380 per kilo respectively.

"The maintenance of easy monetary policies and the likely reintroduction of quantitative easing policies provide the rationale for stable if not higher Gold Prices," says London market-maker HSBC in a note today.

Reviewing interest rates outside the US, Eurozone, Japan and UK, "Many policymakers seem to have been surprised by the strength of growth in Q2, but are also somewhat skeptical that the strong pace can continue," says Standard Bank's chief currency strategist Steve Barrow.

The Reserve Bank of Australia – where GDP growth has jumped to a 3-year high – last raised its key lending rate in May at 4.50%.

Sweden's Riksbank today raised its lending rate to 0.75%, saying that GDP growth will improve and labor demand look "substantially" better.

Over in India on Wednesday – where GDP growth for 2010 is pegged at 8.2% by Goldman Sachs' analysts – local Gold Prices reached new record highs above 19,230 Rupees per 10 grams, The Asian Age reports.

"Apart from bad economic news globally, a weak Rupee is also pushing up prices in India" – home to the world's hungriest gold-consumer market – the newspaper says.

Going into the traditionally strong autumn gold-buying season, "Gold consumption is expected to be strong in India this year," says Kuljeet Kataria at Motilal Oswal Securities in Mumbai, "because the monsoon has been good.

"That should lead to higher rural incomes – places where there is no [formal] banking."

"This demand from emerging countries – if it's really going to stop and fall off a cliff, it's going to be because of economic developments, not high prices," says US Global Investors' Frank Holmes, speaking last night to South Africa's MineWeb.

Worldwide, "Gold is basically looked and perceived more and more as a safe-haven investment," he adds. "The US, Western Europe and Japan are close to buckling under the weight of their own sovereign debt issues, and government budget deficits remain large and persistent and, as a result, the major paper currencies are low."

The world's seven most populous countries also have the strongest "emotional attachment" to Buying Gold, notes Holmes.

In the US, meantime, an article from Forbes magazine highlighting "Six Ways Retirees Can Beat Inflation" today does not mention Gold Investing.

"Gold has doubled since 2006," adds a personal-finance video at Yahoo.com, sponsored by the Fidelity fund group. "This train left the station a long time ago.

"So before you pour your savings into gold, be careful...A lot of the money's already been made."

Ready to buy gold today despite what the financial press says...?

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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