NEW YORK (Commodity Online):
Speculators who pushed up Gold prices to record highs have brought the prices
down but the yellow metal may begin its comeback sooner rather than
later, possibly in the next few days, according to Jeff Nichols,
renowned precious metals economist and Managing Director of American Precious
Metals Advisors.
Although physical demand in world bullion markets remained firm, it
seemed to me that the price was moving up too fast too soon as institutional
speculators extended their “long” positions in “paper” derivative markets, he
said.
"Now - rather than any dramatic reversal in world physical markets
- it looks like the precipitous price decline in recent days can be blamed
entirely on these same speculators (including some prominent hedge funds and
the trading desks of the big Wall Street banks) reversing their positions or
cashing out of gold altogether.
Nothing that has occurred in the past few days in any way diminishes my long-term enthusiasm about gold-price prospects. The same bullish gold-market fundamentals and macroeconomic trends that I have been discussing for many years now remain in place and promise significantly higher Gold prices over the next five years or longer.
Nothing that has occurred in the past few days in any way diminishes my long-term enthusiasm about gold-price prospects. The same bullish gold-market fundamentals and macroeconomic trends that I have been discussing for many years now remain in place and promise significantly higher Gold prices over the next five years or longer.
Admin comments :
The correction in gold prices has been modest at 15% so far and it is
not unusual considering the pace of growth in prices this year.
Reason that gives an impact to gold price:
1) Gold falling victim to
excessive volatility
Over the last month gold has made a new record high twice but has also
been exposed to three 100+ dollar corrections. This has at least near-term
reduced the safe haven flows as the increased volatility has made it
increasingly difficult to trade and has prompted some gold bulls moving to the
sideline to wait for lower prices and hopefully calmer trading
conditions.
2) During the same time investors in ETFs and futures have reduced
exposure to gold by nearly 300 tonnes to 2,935 tonnes as cash and/or bonds have
met increased demand.
3) U.S. government and its allies in Western Europe strive to suppress
the price of gold so that market can remain active.( check this )
However there is still some evidence that give us some hint the gold
price will shoot up again after this correction.
1) Malta bought 3,000 ounces of gold
European central banks have become net buyers of gold for the first time
in more than two decades, the latest sign of how the turbulence in the currency
and debt markets has revolutionized the bullion market. Malta has bought 3,000
ounces of gold. Mexico, Russia, South Korea and Thailand have all made large
purchases this year, in a move to reduce their exposure to the dollar. Globally,
central banks are set to buy more gold this year than at any time since the
collapse of the Bretton Woods system 40 years ago — the last time the value of
the dollar was linked to gold. European central banks have added about 25,000
ounces, or 0.8 tonnes, of gold to their reserves in the year to date, according
to data from the European Central Bank and the International Monetary Fund.
2) Israel issues first gold coin (recently 21/09/11)
The Israel Coins and
Medals Corp. on Wednesday unveiled the first Israeli gold coin, coinciding with
Jerusalem Day. The gold coins are valuable as collector’s items and as
financial investments. The Tower of David edition will be limited to 3,600
coins. In addition, there is a strict limit of five gold coins per customer.
The coins in the series are now legal tender and are issued by the Bank of
Israel.
Take this opportunity of correction time to buy as many gold as u can, so that there will be no regrets in future !!
