Latest News and Reviews

Gold May Reach Record In 2009

A London based company GFMS Ltd. said in a report that Gold might hit a record high this year. The company explained that central bank spending causes people to speculate an inflation in the future making it easy for the bullion to easily reach $1,000 an ounce.

The metal exceeded $1,000 on February 20, and since then it has dropped up to 13%. In March 2008 gold price hit a new high of $1,032.70 an ounce. According to Philip Klapwijk, GFMS chairman that the reason for a bit pullback of the price in February was the reaction of the market towards the breakdown of the demand of jewelry and scrap booming. In the short to medium term, gold may still fall to its $800 low. This may be the lowest for the year and may encourage an increase of demand the chairman further said.

Bloomberg did a survey of economist and concluded that US inflation will soon return in the 4th quarter and continue to accelerate in the 2nd quarter of 2010. With the current global economy situation, the US stimulus plans may cause the dollar to weaken, which may causes for the gold to be more appealing as an investment alternative.

On April 2, the assets of SPDR Gold Trust which is the largest exchange-traded fund backed by bullion have reached a record 1,127.44 tons. Gold in SPDR Gold Trust has now took the record from Switzerland being the sixth largest gold holding in the world.

In Turkey, Istanbul Gold Exchange reported that the country had imported 40kg or 1,286 troy ounces of gold in March compare to zero in January and February. Turkey is the world’s 3rd largest gold jewelry manufacturer in 2007. Last year import for the precious metal drop to only 165 tons or a 29% decline, which is the lowest since year 2002.

India on the other hand is the world’s biggest gold buyer. Gold Import for the country in the past 2 month had also fallen to nearly zero. Bombay Bullion Associated Ltd. reported that India gross gold import fell to 720 tons in 2008, which is about 16 percent lower than a year before that.

Various reasons made the global gold supply fell 40 tons to only 3,880 tons in year 2008. The main reasons include the 51 ton reduction in Indonesian production and power shortages that causes a limited output in South Africa. However, an estimated addition of between 20 to 30 tons of production may occur this year, if the prediction is correct this will be the first increase since year 2005.