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Gold Breaks Above $1,000/oz on Global Safe Haven Demand

Commodities / Gold & Silver 2009 Feb 20, 2009 - 12:13 PM GMT

By: Mark_OByrne

Commodities Gold has again risen above the important level of $1,000/oz due to increasing safe haven demand on the unprecedented and worsening global financial and economic conditions.


“While gold has become overbought in the short term, its medium and long term fundamentals remain as sound as ever” Mark O’Byrne, executive director of Gold and Silver Investments said. O’Byrne said that “with the global economy slowing very sharply, international demand remains very strong as seen in gold coin, bar, certificate and exchange traded fund demand.”

“Governments and central banks, in their desperate attempts to avert deflation, are printing money as never before and are debasing their currencies and risk causing an international monetary crisis where investors and savers flee paper assets and currencies into hard, tangible, finite assets.”

Besides increasing retail, pension and institutional demand, many central banks are increasingly favourable to gold. Russia's central bank has increased gold's share in reserves, and plans to continue this trend in 2009, first deputy chairman told Reuters in an interview on last week.

And this marked rise in demand comes at a time when world gold production is actually falling. While investment demand remains very strong and is increasing there are growing fears about the declining supply of gold - the world's mine gold supply has been falling in recent years and it fell to 2,385 tonnes last year, down 3.6 per cent from 2007 (despite the rise in prices in recent years).

“Retail investors have realised that gold offers an effective hedge against depreciating currencies and sharp currency movements, is an effective inflation and deflation hedge, and is a proven safe haven in times of financial turbulence. The main drivers of interest in gold investment remain the same: unprecedented macroeconomic and systemic risk and money prininting on a scale never seen before”.

This is a recipe for markedly higher prices in the coming months and the inflation adjusted high of some $2,400/oz looks more and more likely in the next few years.

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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