Gold ETF Holdings Begin to Climb Again as Price Strengthens


". . .with the Chinese and Russian Central Banks buying gold, and western Central Banks loath to sell. . .this will help underpin gold and silver prices."

With the gold price moving back up over $950 again late last week, some analysts see the metal price poised for new heights - and there is now evidence that investment interest in the metal, which had been fairly static for the past month may be beginning to rise again. There has also been some recovery in Indian gold imports but there are also fears that these could fall back again with the latest price rise as these have proved to be fairly price sensitive over the past few months.

The revival of active investor interest is shown by a 13.14 ton increase in the holdings of the SPDR Gold trust - the world's largest gold ETF. The holding now stands at 1,118.76 tons as of Friday, after showing very little movement in either direction since April 17th. While the holding is still some 8.92 tons below the 1,127.68 ton record recorded on April 9th, there is the strong possibility that it will attack this level again given the resumption of further economic gloom after a few weeks of possibly undue optimism.

Silver has also been benefiting despite its heavier proportion of industrial usage. It is seen as a much cheaper way of entering the precious metals investment sector as the price does tend to get dragged up by that of its sister metal and also tends to be more volatile. At the time of writing, silver is at $14.65 an ounce - a little down from a $14.84 brief spot peak reached on Friday.

A number of economists are pointing to parallels with the Great Depression and the more recent Japanese deflation which show, that if history does repeat itself, markets could continue to fall for a very long time and there is also evidence that with the Chinese and Russian Central Banks buying gold, and western Central Banks loath to sell, that this will help underpin gold and silver prices. Interesting times!

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