Shouldn't You Be Worried about the Gold Price Fall? And What about Silver?

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...there are also signs of a shortage of physical gold for investment purposes. The U.S. Mint has had to halt sales of one ounce gold American Eagles and Gold Buffalos due to a shortage of supply and gold dealer Blanchard & Co notes that South African Krugerrands are also very hard to come by in the U.S., so there is an underlying demand swell at these prices...

...August is typically a weak month for the gold price - indeed it has fallen during August in virtually all of the past five years - and in most of those years it has made a strong recovery throughout the autumn, or fall. The question is will this year be any different? In recent weeks, the sharp downturn in the gold price has been mirrored by an equally sharp uptick in the dollar's fortunes against the accepted basket of other currencies. This is not, as we have said before, because the U.S. economy is in reality any stronger than it has been through the period of the declining dollar - indeed it may be weaker than ever - but because the economic malaise that began in the U.S. has been exported to other countries and their currencies are now perceived as being even more weak than the dollar, at least for the time being...

What must be encouraging for the gold investor, though, particularly for those coming in at the current price level, is that a surge of buying coming in from India, the world's largest gold consumer, seems to be underpinning prices when they below $800 an ounce. We have seen reports over the past few weeks that there had already been a strong turn around in buying interest as the Festival and wedding seasons there approached, and as gold plunged down through the $800 mark the buying accelerated and, according to the Times of India the sales volume has almost doubled in the past four days alone as the local price got down to Rs 11,000 per 10 grams (approx $800 per ounce at current exchange rates)...

Elsewhere there are also signs of a shortage of physical gold for investment purposes. The U.S. Mint has had to halt sales of one ounce gold American Eagles and Gold Buffalos due to a shortage of supply and gold dealer Blanchard & Co notes that South African Krugerrands are also very hard to come by in the U.S., so there is an underlying demand swell at these prices...

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