Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Breaks $1300 as London Bullion Market Meets Investment Demand

Commodities / Gold and Silver 2010 Sep 27, 2010 - 09:25 AM GMT

By: Adrian_Ash

Commodities

Spot Gold Prices broke above $1300 an ounce early in London trade on Monday, pulling silver to new 30-year highs above $21.60 as world stock markets crept higher.

US crude oil contracts held north of $76 per barrel while the US Dollar recovered from new 5-month lows to the Euro, hit overnight in Asian trade.


Major economy government bonds rose, pushing interest rates down across the board and nudging 10-year UK gilt yields back below 3.00%.

"The conditions for the kind of sharp fall in Gold Prices that followed the 1970s' bull market are entirely absent today," said investment author and pension-fund manager Shayne McGuire this morning at the London Bullion Market Association's annual conference.

After gaining 1000% in the previous 10 year, he said, gold only fell against a backdrop of "sky high interest rates, low equity valuations and - most importantly - low debt-to-GDP ratios in the developed world."

Held this year in Berlin - and again sold out, as in Edinburgh 2009 - the LBMA conference brings together 450 bullion-market professionals representing industry players from miners to refineries, assayers, bullion banks, vault operators, investors and analysts.

Chief executive Stewart Murray opened the two-day meeting by reminding last year's delegates of their average Gold Price forecast for today's event, "a bullish" but overly cautious $1181 per ounce.

By Sept. 2011, according to the attendees' average forecast today, the Gold Price will reach $1406 per ounce - "marginally less bullish than last year," as Dr.Murray noted.

Two issues dominate this year's presentations - regulation of London's "over the counter" physical bullion market, which the Association is working to "get ahead" by formalizing its forward-market data as chairman Kevin Crisp noted, plus the gathering pace of institutional Gold Investment.

"The financial crisis has created a seismic shift in Gold Investment," said Graham Birch, former manager of the $3 billion Blackrock Gold & General fund, and now a non-executive director of Petropavlovsk.

"Institutional investors now worry about return of, rather than return on, their money," said Birch, as well as expecting lower rates of return, suffering very poor interest rates on cash, acknowledging counterparty risk as a major concern, and needing to diversify across asset classes.

"Gold Price movements will continue to be dominated by investors," Birch went on, noting that the last year of the Central Gold Bank Agreement - which expired Sunday, with an agreed ceiling for 400 tonnes of gold sales - saw Europe's major holders unload only 6.2 tonnes of their Gold Bullion, a drop of 92% from the previous year.

"Gold is the ultimate financial insurance," said Teachers Retirement System of Texas manager Shayne McGuire, "and pension funds are only just beginning to talk about this."

Current pension fund allocations to gold stand around 0.3%, McGuire showed in his speech, with all physical Gold Investment now equal to perhaps 0.5% of the world's total investable wealth.

That compares with 3% at the 1980 price peak, a level of 5% in 1968, and perhaps 20% or more prior to 1933.

"Investors should be positioning for 'tail events'," said former Bank for International Settlements and current OECD economic advisor William White in his keynote address to the LBMA conference.

Warning that government and central-bank policy responses to the financial crisis are both based on "uncertain" models - and "could lead to further bubbles" as they have since 1987's October Crash in the stock market - White said he fears deflation ahead, with a clear possibility of a massive spike in inflation.

"Is there room for gold in investment portfolios in this kind of world? The answer, I think, is undoubtedly yes."

By Adrian Ash

BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is 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.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in