Gold has gone up to touch all time highs. Despite the European Bazooka and the melt up in markets,gold has not come down from the highs it made during the Greek crisis.It’s a way of the market telling that they have now little faith in the paper currency being printed in the trillions by the developed countries.While there are many complexities in valuing gold due to its role as a “currency” as well as a “commodity” for use in decorative purposes,I think gold gains from here on due to the systematic risks.Rather than an inflation hedge , I think Gold goes up as the risks to the financial system rise . This plus the quantitative easing and buying of low quality bonds by the ECB and the FED makes the attraction of gold greater. I bought a\u00a0 position in gold earlier and am thinking of adding more .<\/p>\n
Gold traded near a record in Asia after surging to an all-time high yesterday on investor concern that international financial support for indebted European states will depress currencies.<\/p>\n
Bullion for immediate delivery lost 0.4 percent to $1,228.47 an ounce at 9:58 a.m. in Singapore after climbing to a record $1,234.50 yesterday. The previous high of $1,226.56 was set on Dec. 3.<\/p>\n
Gold resumed its rally yesterday as the euro fell for the first time in three days on doubts that an almost $1 trillion loan package will be able to prevent Greece\u2019s sovereign debt crisis being repeated in other European states.<\/p>\n
\u201cAll we can do is to put our money into real assets because paper money everywhere is being debased,\u201d Jim Rogers, Singapore-based chairman of Rogers Holdings, told Bloomberg Television today. \u201cI\u2019m not selling gold forever.\u201d<\/p>\n
Gold has climbed 12 percent in 2010, heading for a 10th consecutive annual gains. This year, the euro has dropped 12 percent against the dollar, the MSCI World Index of major equity markets fell 2 percent and returns on benchmark U.S. treasuries advanced.<\/p>\n
June-delivery futures climbed 0.7 percent to $1,228.20, after settling 1.6 percent higher at $1,220.30 yesterday. The contract reached a record $1,235.20 late in the session.<\/p>\n
Europe\u2019s debt crisis \u201cisn\u2019t going to be that easy to fix,\u201d said Gavin Wendt, senior resource analyst with Mine Life Pty in Sydney. Gold is being driven by \u201cfear that, even though they\u2019re throwing a hell of a lot of money at this, it won\u2019t be resolved and that these debt issues will continue to spread to other countries, primarily Spain and Portugal.\u201d<\/p>\n
Magic Wand<\/p>\n
\u201cThey\u2019ve waved this magic trillion-dollar wand in front of everyone, but where is it going to come from?\u201d Frank McGhee, head dealer at Integrated Brokerage Services LLC in Chicago, said yesterday. \u201cThey\u2019re stopping a debt problem by creating more debt. Sooner or later, everybody stops trusting paper, and that\u2019s the lure of gold.\u201d<\/p>\n
Among other precious metals, platinum for immediate delivery fell 0.4 percent to $1,698.35 an ounce, its first decline in five days. Silver was little changed at $19.2825 an ounce, after surging 4.2 percent to a five-month high yesterday. Palladium lost 0.2 percent to $532.75 an ounce after four days of gains.<\/p>\n
Silver and platinum are likely to \u201cwax and wane\u201d with the underlying economic outlook, given their industrial uses, Wendt said. Gold reaching $1,500 by year-end would be \u201cquite a reasonable price target\u201d given the renewed demand, he said.<\/p>\n
\u201cThere\u2019s more reasons to hold gold now than there were even 12 months ago when we had the remnants of the financial crisis,\u201d he said.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"
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