Precious Metals Report

Source:

"Gold hit new highs in euro, rand and real as well as Canadian and Aussie dollar terms. . ."

Last week was a great run for the gold price, fuelled by continued safe-haven investment demand. SPDR gold in trust rose to 843.59 tonnes from 832.88 tonnes one week earlier and 780.23 tonnes at the start of the year. This is an annualized run rate on investment demand (768 tonnes) that is well more than double the 313 tonnes of gold invested in all gold-ETF vehicles in 2008. Gold hit new highs in euro, rand and real as well as Canadian and Aussie dollar terms, as the gold price strength was coincident with continued strength in the U.S. dollar.

Our message in our marketing last week was to be wary of the combination of decent gold prices at the same time as decent equity valuations (based on January 23 pricing). So, while the week turned out to be a good one for gold prices, the equities pulled back on some investor profit-taking.

The gold price increased 3.1% last week to close at $927.85. The Commitment of Traders speculative net long position (reported based on last Tuesday's closing figures) increased 11.3% to 152,520 contracts, up from 137,015 contracts the week previous.

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