The rush to physical gold amid devaluing currencies is a world phenomenon largely unnoticed in the US because of the flight to safety in the US dollar and a strong institutional bias among Wall Street which prefers to deal in paper for its higher turnover and richer fees.
If this trend changes, if the dollar loses some of its own safe haven appeal, if the gold shorts are forced to capitulate despite the propping from the Central Banks, then this could be a surprisingly strong market move.
Gold is already proving to be a desirable alternative to the Swiss franc which as we have noted before has become a disgraceful shadow of its former self because of Swiss government mismanagement. Watch the Swiss howl when their interest rates must move higher to accommodate the debasement of their currency to salvage a corrupt banking sector.
The Economic Times (India)
Gold at all-time high of Rs 15,800 per 10 gm in Delhi
19 Feb 2009, 1350 hrs IST
NEW DELHI: Surging gold prices set yet another record of Rs 15,800 per 10 gram in the national capital on Thursday in line with the surging global bullion markets on speculation that the global recession will deepen further.
The precious metal recorded fresh gains of Rs 50 to Rs 15,800, a level never seen before, after poor economic data of Russia and Japan raised concerns of a growing malaise of global recession.
Jewellers and market analysts said the demand of the yellow metal picked up after the global equity and forex markets dropped in the recent past.
They said shaky investors find no other option but to park their funds in the precious metals, while physical buying for the current marriage season declined substantially
We do not see any customers these days as surging gold prices cooled down the demand for jewellery in this marriage season," said a Delhi-based Jeweller Gaurav Anand.
A similar firming trend in other regional bullion markets in the country also dampened trading sentiment to a great extent. In Kolkata, the gold opened at a record high of Rs 15,925 per 10 gram.
Meanwhile, gold in futures trading touched a new high by rising 0.88 per cent to Rs 15,712 per 10 gram at the MCX counter.
