Gold Bullion Unique as No Counter Party Risk

Gold is unique among asset classes as it is the only asset class not dependent on the performance of auditors, management, corporations, financial institutions, banks, politicians and governments. Nor should physical gold be dependent on the performance of trustees, custodians and or sub custodians. Gold does not depend on the performance and health of the wider economy and as importantly when you buy gold in its physical form the

Global markets perceive that economic green-shoots may be growing on stony ground as the rally in the Dow ran out of steam last week. Inflation figures published in the US suggested that core inflation may be higher than previously expected, contributed to the down week for the Dow and a minor strengthening of the Greenback.

Despite the dollar strengthening, gold benefited from the outflows from both stocks and commodities.

Further consolidation was seen yesterday with gold and silver rising marginally again and both look set to have a second strong week of gains.

While the staggering pace of economic decline has certainly abated, individual economies and the global economy continues to deteriorate as recessions deepen internationally.

Gold and silver were essentially flat yesterday and consolidated on recent gains despite a slight dollar recovery and marked weakness in equity markets.

Gold has fallen somewhat in Asian and early European trading but still looks good from a technical perspective.

Gold and silver took a breather from their gains of last week and consolidated yesterday with marginal losses for both metals. The dollar recovered somewhat from its sharp falls of last week as did long term US interest rates (10-Year: 3.180% -0.113) but US stock markets came under pressure.

Gold threaded water in Asia but has risen sharply in early trading in Europe as the dollar has again come under pressure with the US Dollar Index falling to 82.40.

Gold rose for the fourth day yesterday and is up some 3.5% so far this week and set to complete a very strong week. As expected, under reported and leveraged silver has outperformed gold and surged more than 12% this week. A close above $14.60/oz, could see silver again challenge recent nominal highs at $20.88/oz.

Gold’s rise in recent days has been volatile with sharp moves up followed by retrenchments and this is leading to an under appreciation of gold’s move up and a perception that gold is struggling. Some of the larger shorts appear to be engaged in a form of managed retre

Gold and silver rose marginally yesterday as the dollar again fell. Gold initially surged to over $914/oz (from $901/oz) prior to determined selling capped the price and saw it fall again below the psychologically important $900/oz mark. Silver was again more resilient and rose 2.8% to $13.40/oz. Both have gradually eked out gains in Asia and early European trading.

Concerns about the international financial system and their implications for the dollar and other currencies and inflation going forward look likely to see gold remain firm for the foreseeable future.