A Quick Look At Gold Trends
With the price of bullion at all-time highs, there's a raging debate
on gold as an investment – is it overbought or can it go still higher?
What's the inflation risk to the dollar? Should we be more worried
about deflation?
Every Friday we try to address the factors affecting gold in our award-winning
Investor Alert,
which recaps the week just ended and also looks forward to provide
insights on what might lie ahead. Along with gold, the Investor Alert
covers energy and natural resources, global emerging markets, domestic
equities and the bond market.
We encourage everyone with an interest in our key sectors to join
the 23,000-plus individual investors who now subscribe to the Investor
Alert and the 10,000 investment professionals who receive its sister
publication, the Advisor Alert. Signup is free and easy – just follow the appropriate link.
To give you an idea of the Investor/Advisor Alert's value, here are a few of the gold-related items from the latest issue:
- International Monetary Fund data shows
that currency holdings among reporting central banks reduced the U.S.
dollar's weight to 62.8 percent as of June 30, the lowest on record.
The shift in reserves to euros and yen confirm that world leaders are
acting on threats to diversify out of the dollar based on lagging
performance on U.S. assets and a weakening dollar.
- According
to UBS, investment growth is not coming from the world's largest
bullion-backed exchange-traded fund, but rather from private purchases
of bullion and Indian buying during the festival season. COMEX net long
positions stood at a record high of 23.5 million ounces.
- Macquarie
Bank said exchange-traded funds backed by physical supplies of
industrial metals may potentially drive prices higher than index funds
that buy futures contracts because there are currently talks of
regulatory measures being imposed in the futures markets.
- An
analysis by the Bank Credit Analyst shows gold and silver markets to be
fairly overbought, but BCA expects that any correction should prove
short-lived in the absence of a reversal in the dollar and/or
deterioration in liquidity conditions. The Bureau of Labor Statistics
says the consumer price index for jewelry in the U.S. rose to its
highest level since January 1996.
The above story is the opinion of the author only and it does not reflect
iStockAnalyst opinion. Further, the author is not personally advising you
regarding the suitability of the story for your investment needs. In no event
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information. Please consult your investment advisor before making any investment
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