Thursday 18th March 2010
The Gold Price ticked higher from its second dip to $1120 in two days Thursday lunchtime in London, pushing north for Sterling and Euro buyers as world stock markets held flat.
"The equities markets have been a bit firmer," said one Sydney strategist to Reuters overnight. "That's probably taken a little bit of interest away from gold.
"It appears Gold has once more been influenced by large institutional trading, which has contributed to the recent week's volatility," says a note from Swiss refiner MKS's finance division.
"Gold is turning out to be an excellent 'sideways' trade," says bullion bank Scotia Mocatta. "The [US Dollar] range over the last month has basically stayed between $1088 to $1145 an ounce."
"Gold will likely be kept firm into 2010 and 2011 by a relatively weak greenback, record-setting US fiscal deficits, rising inflation concerns and higher jewelry demand, which has been hit hard by the recession," reckons Bark Melek, global commodity strategist at BMO, the $373 billion asset manager based in Montreal.
"Gold is an excellent hedge and will remain stable...The end to producer hedging, central bank net buying after a very long pause, and concerns that excessive US and European government debt may lead to future monetization are additional key drivers for the outlook."
Melek is more bullish still on silver, however, noting that new supplies were flat in 2009.
"With demand for industrial silver rebounding sharply in 2010, likely around 19%, as global industrial activity and auto production move into recovery mode, supply/demand fundamentals look set to tighten materially in 2010."
"Gold and Silver prices should, in our view, trend higher over the next few quarters," agrees the latest Commodities Review from French bank Société Générale
"We expect investor buying of gold and silver to continue as inflation fears are likely to increase on strong economic growth in emerging economies and on concerns that developed countries may be tempted to monetize some of their large amount of sovereign debt."
Adrian Ash, 18 Mar '10
