Re: To buy or not to buy.....gold
http://latimesblogs.latimes.com/money_co...ic-jitters.html
Gold prices were at record highs Tuesday following word that the Bank of Korea had made its first gold purchase in more than a decade and as global economic concerns reinforced gold’s image as a safe haven from a turbulent stock market.
Near-term gold futures in New York jumped $22.90 to close at a record $1,641.90 an ounce.
Silver also gained, rising 78 cents to $40.08 an ounce, although the white metal has been stuck in a narrow range in recent weeks even as gold has continued to surge.
“The flight-to-quality money is flowing into gold,” Adam Klopfenstein, a senior strategist at MF Global Holdings, told Bloomberg News. “There’s a lot of uncertainty about the global economic recovery.”
From Reuters:
South Korea spent more than a billion dollars in its first gold purchase in more than a decade, as uncertainty about global growth and sovereign debt push central banks around the world to diversify foreign reserves.
A brittle global economic recovery and precarious debt conditions in the United States and Europe have boosted the safe-haven appeal of gold, lifting bullion to a record high on Friday.
The Bank of Korea said in a statement on Tuesday it bought 25 tonnes of gold over the past two months, raising its gold holding to 39.4 tonnes.
Reserve currencies, like the dollar and euro, "have been losing their clout since the recent global financial crisis partly due to abnormal monetary policy adopted in many countries and fiscal deficit problems," said an official at the central bank who declined to be named because he was not authorized to speak to the media.
Gold's price now is up 15.5% year to date. Silver is up 30%, but nearly all of that gain occurred amid frenzied buying in the first quarter. Silver peaked at $48.58 an ounce on April 29.
Gold Tops $1,660 as U.S. Economic Woes Boost Demand for Investment Haven
By Pham-Duy Nguyen - Aug 2, 2011
http://www.bloomberg.com/news/2011-08-02...ses-demand.html
Gold futures topped $1,660 an ounce, extending a rally to a record, as escalating concern that the global economy is losing momentum spurred demand for the precious metal as an investment haven.
U.S. equities headed for the longest slump since 2008 after a report showed that consumer spending unexpectedly dropped in June for the first time in almost two years. President Barack Obama signed a debt-limit compromise, preventing a default. Gold has gained 39 percent in the past year amid low interest rates and two rounds of “quantitative easing” by the Federal Reserve to revive the economy.
“At the end of the day, they’ve got an extended check and a contracting economy,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “That puts pressure right back on the Fed to go to a QE3. Every reason we’ve ever had to buy gold is coming up in spades.”
Gold futures for December delivery rose $22.80, or 1.4 percent, to close at $1,644.50 at 1:45 p.m. on the Comex in New York. The metal reached $1,661.90 in electronic trading after the settlement.
Gold also climbed to all-time highs in euros, pounds and Canadian dollars as manufacturing indexes in the U.S., Europe and China declined in July.
“The flight-to-quality money is flowing into gold,” Adam Klopfenstein, a senior strategist at MF Global Holdings Ltd. in Chicago, said in a telephone interview. “There’s a lot of uncertainty about the global economic recovery.”
Yesterday, holdings in exchange-traded products backed by gold climbed 1.4 metric tons to a record 2,153.6 tons, data compiled by Bloomberg show.
The U.S. still faces the prospect of a credit-rating downgrade, Bill Gross, who runs the world’s biggest bond fund, said yesterday on PBS’s Nightly Business Report.
