Gold Prices

Gold in Surplus, but Still Trending Upwards

2006-01-31T05:09:00.000Z

After a brief drop in gold prices, gold is again on the uptrend, with speculators pushing up the price close to $570 USD per oz. The $600 USD psychological barrier is not far away. With the uncertainties of US-Middle East politics, oil supplies, inflation and the US economy, precious metals are all trading at their highest in 20+ years.

However, some are saying that this will probably be as high as gold will go in the next few years. If we look at it from a purely demand/supply point of view, gold output actually surpassed physical demand in 2005. This is not surprising; the gold jewellery market is highly price elastic. Gold is now highly sought after in industry, but again, this is dependent on global demand for electronics and other gold-related products.

The main drive has been speculation. Pure and simple. Sometimes, that is usually enough.

Sources:
Futuresource.com
Thehindubusinessline.com

Golden Opportunities

2006-01-19T11:00:00.000Z

The last 2 days have seen gold prices drop from a 25 year high, to a support level of around $545 USD per oz. The price fall has been attributed to heavy selling after highly speculative gains in the last few weeks. In addition, the tech stock crisis in Japan meant there was heavy selling of crude oil futures in order to meet margin calls.

The fall in the spot gold price presents an excellent opportunity for investors who are interested in long term investments in gold related stocks and funds.

Demand for gold has been higher than supply since 2003, and the gap is expected to grow considerably over the next few years. With the current political climate and economic uncertainty, gold prices will most certainly continue to rise.

Sources:
MarketWatch

Predictions for the Weeks Ahead

2006-01-16T03:51:00.000Z

Gold prices have gone up by about 10% in the last month, and shows little sign of faltering. Other metals have also been following a similar trend, and are now trading near all-time highs. The upward trend can be attributed to uncertainty over supply and the in part, to the growing demands of a booming Chinese economy. The weak dollar has also been a major factor, together with high oil prices.

Gold is not expected to drop below $500 USD per oz. anytime soon. Investors and speculators are flocking to gold related stocks and funds in an effort to hedge their investments in case of a US-led economic crash.

With even more uncertainty in the Middle East - Iran's stand-off with the UN/USA over their nuclear programme is of great concern - we can expect gold prices to increase by another 5-10% in the next month. A gold price of $600 USD per oz in February-March 2006 is not impossible.

We live in troubled times, and gold is our safety net.

Gold prices reach a 25 year high

2006-01-13T23:03:00.000Z

News Summary

Spot gold prices reached a peak of $556.50 USD an ounce today. Speculative buyers have been pushing up the prices in the US in the last day of trading before the long weekend - Martin Luther King Day is on Monday.

Among the investors buying into the current gold rush are exchange-traded gold funds (ETFs), which have been generating a high level of investor interest since 2005. ETFs are traded on major stock exchanges and give investors a share of gold investments. ETFs are estimated to hold gold reserves equivalent to that of Russia. (That's almost 400 tons of gold!)

The bull run is not restricted to gold. In fact, all the major metal commodities have been on the rise. Platinum reached a 26 year high today of $1,044.40 USD per ounce, just a few dollars short of an all-time high. Other gainers include palladium, silver, lead, aluminum and zinc. Demand has been outstripping supply for years, and the rising cost of energy has only pushed production costs and prices higher.

The recent speculations over interest rates and the strength of the US economy has also weakened the dollar and pushed commodity prices to record highs.

"Gold is more and more becoming an insurance policy against any type of disruptive risk and most portfolio managers believe that gold is an asset which should not be missed in their portfolios," Frederic Panizzutti, senior vice-president at MKS, said in the firm's outlook report for 2006.

Sources:
CNN Money
Reuters
Fin24.co.za

Got Gold?

2006-01-09T01:56:00.000Z

You may ask yourself, why invest in gold? Why spend your money on a lustrous piece of golden metal? Surely there are other investments more worthwhile, such as property, stocks and bonds?

For more info... Click here.