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Gold Continues to Surge in All Currencies on Systemic Financial Counterparty Risks

Commodities / Gold & Silver 2009 Jan 27, 2009 - 06:00 AM GMT

By: Mark_OByrne

Commodities After last week’s strong gains, gold continued to surge in all currencies yesterday reaching new record highs in Euros and pounds sterling. Prices remained firm in early trading in Asia prior to giving up some of yesterday’s gains. But the convincing technical close well above previous resistance should see gold (and silver) soon embark on the next leg up in their secular bull markets.


Resistance for gold was at $880/oz and this may well become support. Next resistance is at $925-$930/oz and a daily or weekly close above that level would likely lead to gold retesting the psychologically important mark of $1,000/oz again.

The dollar has come under selling pressure versus a number of currencies ( down some 0.5% against the Euro - 1.325 EUR/USD) and this should see gold remain well bid. Continuing weakness in stock markets should be supportive also. Especially in the light of the deteriorating macroeconomic (tens of thousands of job losses announced internationally) and financial situation ( Fannie and Freddie, the largest lenders of US mortgages seeking an additional $51 billion to prevent bankruptcy and rapidly increasing cost of bailouts, now in the trillions, in order to prevent a possible systemic collapse of the financial system).

With systemic risk remaining elevated, counter party risk has not been so high since the Great Depression (and maybe higher than even then) and this is leading to safe haven demand for gold bullion as it is the only asset that does not have third party liability.

As a physical asset, bullion is inherently valuable in and of itself. This is to say, physical precious metals have tangible, intrinsic and innate value in and of themselves, and they are, therefore, the only asset class that is not some outside entity's or third party's liability (as is the case with a stock or government or corporate bond). Thus, the investor who owns the physical asset directly, and whether held in his/her personal custody or stored safely in his/her name in an insured account at a qualified facility, will enjoy the sense of security one derives from knowing that their investment portfolio is strengthened by the presence of an actual tangible asset with an intrinsic value, and not just a piece of paper, or derivative product dependent on the performance of a third party or the health of the wider economy.

By Mark O'Byrne, Executive Director

Gold Investments
63 Fitzwilliam Square
Dublin 2
Ireland
Ph +353 1 6325010
Fax  +353 1 6619664
Email info@gold.ie
Web www.gold.ie
Gold and Silver Investments Limited
No. 1 Cornhill
London,
EC3V 3ND
United Kingdom
Ph +44 (0) 207 0604653
Fax +44 (0) 207 8770708
Email info@www.goldassets.co.uk
Web www.goldassets.co.uk

Gold and Silver Investments Ltd. have been awarded the MoneyMate and Investor Magazine Financial Analyst of 2006.

Mission Statement
Gold and Silver Investments Limited hope to inform our clientele of important financial and economic developments and thus help our clientele and prospective clientele understand our rapidly changing global economy and the implications for their livelihoods and wealth.
We focus on the medium and long term global macroeconomic trends and how they pertain to the precious metal markets and our clienteles savings, investments and livelihoods. We emphasise prudence, safety and security as they are of paramount importance in the preservation of wealth.

Financial Regulation: Gold & Silver Investments Limited trading as Gold Investments is regulated by the Financial Regulator as a multi-agency intermediary. Our Financial Regulator Reference Number is 39656. Gold Investments is registered in the Companies Registration Office under Company number 377252 . Registered for VAT under number 6397252A . Codes of Conduct are imposed by the Financial Regulator and can be accessed at www.financialregulator.ie or from the Financial Regulator at PO Box 9138, College Green, Dublin 2, Ireland. Property, Commodities and Precious Metals are not regulated by the Financial Regulator

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. Past experience is not necessarily a guide to future performance.

All the opinions expressed herein are solely those of Gold & Silver Investments Limited and not those of the Perth Mint. They do not reflect the views of the Perth Mint and the Perth Mint accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Mark O'Byrne Archive

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