Retail Investors Join Fear-Driven Gold Rush
Source: ABC, David Taylor (4/19/11)
"There's a new gold rush and getting on board is easier than you think."
There is a new gold rush with the price of bullion edging closer to US$1,500 an ounce, and getting on board is easier than you might think.
In fact it is as easy as going to the corner store.
"People can just come in and literally buy over-the-counter," said Janie Simpson, the chief executive of ABC Bullion. The appetite for gold has never looked so healthy.
The managing director of Commodity Broking services Jonathan Barratt says easier access to the precious metal is boosting demand.
"I think one of the main points which is helping to see gold prices higher is the fact that more people have more access to it, either as an investment or as a hedge and, as a result of that, we find that the supply/demand ratios for the metal are slowly tipping into a deficit, whereas we've always been in the surplus," he explained.
But rising demand from retail investors is seeing businesses such as ABC Bullion struggling to cope.
"Just exponential, absolutely exponential and every day you just don't know when it's going to stop," added Janie Simpson.
"We've had to put on four new staff members in the last six months, and from ten till four every day it's relentless.
Jonathan Barratt says the modern gold rush is facing its next psychological barrier.
"US$1,500 is the big hurdle at the moment," he said. "As to whether or not it pushes through to there, I think will be reliant on how we see inflation over the next quarter and the way it is at the moment, you could probably see it past $1,500 and trade through to $1,550."