You are here: Shelter Offshore » Gold Investment
Sunday, July 05th, 2009
During Tuesday’s summit between Brazil, Russia, India and China (BRIC) at Yekaterinburg, in Russia, Arkady Dvorkovich, a top economic aide at the Kremlin expressed a need for a cautious approach to changing the system of the global reserve from over dependency on the U.S. Dollar.
The statement seems clear enough, take a cautious approach, but none-the-less it’s time to remove the U.S. Dollar as the world’s dominant reserve currency.
While the debate continues about whether to use a basket of different national currencies or to create a new super-national currency, this will all lead to a certain degree of uncertainty about the dollar’s future role - or for that matter, the future role of any major currency. So our question at Shelter Offshore is: “what about gold instead?”
We have been relatively vociferous of late about the state of the British economy, the state of the British government and the overall feelings of negativity and depression that are rising in the UK. Please forgive us for we are not normally politically motivated, but we have been reacting to the strong sentiment we’re hearing from increased numbers of our British readers.
And Britons are not alone in being aware that they are facing the very real prospect of unprecedented and frighteningly bad economic times. All across Europe and on the peripheries of Europe there is unease about the state of nations’ economies. And according to some of the most senior analysts at Citigroup, if the efforts that governments are currently committing to to drag their nations out of economic meltdown fail, we could enter: “a downward spiral into depression, civil disorder, and possibly wars.”
So, could gold sell for up to two thousand dollars an ounce? Again, the analysts at Citigroup believe that this is possible as the gamble that governments are currently taking could either fail and lead to the aforementioned downward spiral of depression, or result in a resurgence of inflation - with both outcomes likely to cause a rush for gold.
Bailout plans, Leninist style nationalisation and billion upon billion of tax payers’ money have so far failed to gain any investor confidence in the markets. Wall Street’s massive sell off on Thursday night followed by a free falling Nikkei sent investors seeking wealth protection into the safe haven of gold investment.
Spot gold rose $2.50 at $9.14 an ounce before New York’s notional close at 21:15 GMT.
“Investors only concentrate on gold. Stock prices and other commodities are not so good,” said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
Ah, the eighties, the best decade ever! The best bands, the best lyrics and the best riots in the UK in centuries as the politicians of the day messed with the economy and people’s lives, and got things remarkably wrong. It would seem that in terms of the latter, little has changed today, but in the face of all this economic uncertainty around the globe one thing is holding firm – and that’s the price, and therefore the value, of gold.
As stock markets around the world tumbled on Monday, gold rose 4%. A yet further weakening of the dollar today has seen gold futures rise by more than twenty dollars – and the sentiment in the market would appear to be that the future is bright, the future is gold coloured – because greater numbers of investors are seeking safe haven assets for their cash.
Come on, wouldn’t you rather have a gold bar under the bed than all of your cash in a British, German, Spanish, Icelandic or US bank? Exactly – and you’re not alone in thinking that gold is the future, according to the Vancouver Sun, mints around the world cannot cope with demand for the precious metal in coin form and the US mint has widened its freeze on gold coin sales.
Yesterday’s slide in the volatile global equities market saw gold making further gains as more investors sought safe haven refuge.
Analysts predict that gold will continue to see gains in the near term while the key agenda for investors remains reduction of risk. Gold prices rose yesterday trading at $862.75 an ounce, up $5.30 an ounce at New York’s notional close on Monday - gaining almost 4% against losses on the equity markets.
Gold traditionally performs well when global equity markets slide, gold has also benefited from the decline in other commodities.
Copyright © 2004-2008 ShelterOffshore.com. All rights reserved. | About Us | Help and Contact Us | Privacy Policy | RSS 
| Site Index
Channels: Live & Work Abroad | Property Abroad | Health Abroad | Saving Offshore | Gold Investment