Gold Prices Continue To Ride The Bull

Insatiable physical demand, volatile markets and enough geopolitical tension to make Henry Kissinger blush. That had gold prices up another $8 to close at its highest level since December 13, $1639.60. Record imports of gold into China helped fuel the metal to higher levels. Last year China overtook India as the biggest market for gold sales and imports into China have set record highs for five straight months. The first quarter looks even brighter as consumers begin to buy gifts for the Chinese new year and other holidays.

While some analysts are quick to point out the rise in demand is seasonal, they hedge by saying gold markets are sensitive to moves in the dollar and any anticipated inflation going deeper into 2012. Consumers in Asia have also started buying precious metals for investment reasons. The sovereign debt issues in Europe and concerns over a Chinese hard-landing are helping to prop demand up as small investors look for any hedge against any economic downturn.

Gold and other precious metals are eagerly looking forward to the upcoming Spanish and Italian bond sales this week. Any weakness in the bond sales or out-sized rates will fuel strength back into gold and silver.

According to James Moore at thebulliondesk.com demand for gold will stay strong in the long-term. “In the long term, gold will continue “to benefit from fund buying as speculative players rebuild their positions,” according to James Moore, analyst at TheBullionDesk.com.

written by

Kyle Pinder has has over five years trading and research experience in the large cap space. While still in grad school, Kyle trades daily and keep Active Investor up to date with the latest breaking news coming out of Wall Street and Washington.
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