Wednesday, February 22, 2006

 

Gold Demand Up 26%: WGC

Reuters has the days' money and metals action. "Gold prices edged lower but held in a narrow band on Wednesday, with the market recovering its poise after a brief dollar-related dip, traders said. Spot gold edged to $553.90/554.80 an ounce in New York afternoon trade, below Tuesday's late quote at $554.70/$555.40. Prices have fallen nearly four percent from their 25-year highs of $574.60 earlier this month."

"Gold momentarily drifted below $550.00 an ounce when the dollar firmed after the U.S. January consumer price index rose 0.7 percent, against forecasts of a 0.5 percent increase. A cheaper dollar often encourages gold buying in foreign currencies, while a stronger U.S. currency can prompt sales for quick profits."

"In other precious metals, silver edged up 4 cents to $9.60/9.63 an ounce, while platinum fell to $1,023/1,027 an ounce from $1,027/1,031. Palladium was quoted at $284/288 an ounce, compared with $290/294."

Reuters got this wrong. "The market also was digesting a World Gold Council report showing fourth quarter 2005 global demand for gold fell 15 percent from the year-earlier quarter." I checked the WGC's web site and here is what they found. "The World Gold Council today announced that demand for gold had hit a record of $53,6-billion in 2005, with a 26% rise in investment demand in tonnage terms in 2005 and a jewellery demand that was 14% higher in dollar terms than 2004 despite the impact of a volatile price in the last quarter."

"Investment in Exchange Traded Funds (ETFs) increased by 79 t during the last quarter of the year alone and it is estimated that other institutional investment in the period approached 200 t."

Comments:
why do people buy mere worthless relics, baubles and trinkets of a bygone era?
 
You guys read the recent articles on the Dow Theory non-confirmations? Those and other technical indicators put the market on the edge of the cliff.

Every day brings more bad news that's incredibly bullish for PMs.
 
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