Gold and silver have traded a bit lower on Friday and are both heading for a loss of 1% on the week in dollar terms. This is to be expected after the 3% and 5% returns of last week and the trading action this week has all the hallmarks of consolidation.
US dollar gold prices drifted lower to $1,722 an ounce this morning in London, slightly down from last week's close, while stock markets also fell along with US Treasury bonds as US policymakers continue to discuss how to deal with the so-called fiscal cliff.
Metals markets opened mixed this morning as the final session of quite an active week got underway. Spot gold was down less than $2, with a bid at $1,731 and silver was off 13 cents at $32.18 per ounce.
Prices in the wholesale gold bullion market traded above $1,730 an ounce Friday morning in London, having earlier touched a two-week high, while stocks fell and the dollar and US Treasury bonds gained.
If you're a true "gold bug," or are just an investor who's bullish on gold, you have to like what this list of the world's biggest holders of gold says about the direction of gold prices for the next few years. It's highly bullish.
Somewhere deep in the bowels of the world’s Western central banks lie vaults holding gargantuan piles of physical gold bars… or at least that’s what they all claim. The gold bars are part of their respective foreign currency reserves.
Gold no longer has a legal role in the world’s monetary system, but because of a collapse of faith in sovereign obligations and a coming complete lack of trust in governments and financial institutions, gold is going to quickly become a core banking asset.
GFMS forecasts that investors will purchase 973 tons of gold in the second half of 2012, more than during the wild gold market of the summer of 2011. This surge in demand for the yellow metal, GFMS says, will move gold above the $1,850 an ounce level.
Gold was off its seven-month high on Monday but the recent wave of central banks who started printing money and bond buying again is very supportive for the yellow metal and euro gold remains close to record highs.
Even though real rates are have risen slightly, they remain below their historical average and levels below 2% have still been supportive of rising gold prices. The 2% real interest rate threshold has served as an inflection point for gold prices.