Gold is Moving Again

It has to happen. Hell will freeze over (is there such a place?) before gold is stopped in its march to $1,500+. Gold moves primarily on the three-fold cord of war, uncertain econoic activity, and inflation. We're still in a war(s), economic uncertainty is about as high as it can get. And down the road, the BILLIONS, maybe TRILLIONS, of US$'s that are being printed will take inflation into double digits again.  

Strong investor buying on Monday pushed the price of gold above $900 a troy ounce, hitting a 3½-month high in dollar terms and posting all-time highs in euro and sterling, in a stark sign of money seeking refuge from equities and bond markets. Traders-investors, particularly in continental Europe and the UK, were pouring money into gold exchange-traded funds – a popular way to gain access to the metal – and also noted strong buying of physical gold, from coins to bars.

Edel Tully at Mitsui & Co Precious Metals in London said gold was the “obvious shelter” for safe-haven investors.

In London, spot gold rose to $915.30 an ounce, up from New York’s last quote on Friday of $898.40. The precious metal also hit an all-time high in both sterling at £661.55 an ounce, and in euros, at €701.55 an ounce. Total amount of gold held by the world’s gold ETFs last week rose for the first time above the 40m ounce level. Together, such investment vehicles are now the largest holders of physical gold after the official reserves of the US, Germany, the International Monetary Fund, France and Italy.

“The aggressive appreciation in the ETF contracts ... is the clearest signal to date this year that gold is one of the limited assets that investors want exposure to during these frantic times,” Ms Tully said. Hector McNeil, managing director at ETF Securities, said that about 60 per cent of those inflows were into the yellow metal. “Gold is set to rise dramatically,” he said.

In the short term, traders said gold was likely to consolidate above $900 an ounce this week and could test the $930 an ounce level previously touched in October. Spot gold in London, the market’s benchmark, hit an all-time high of $1,030.80 in March. In the last thirty days gold is up $35.