Weekend reading on gold

Lawrieongold readers may be interested to read my two most recent articles on SeekingAlpha.com and Sharpspixley.com which both look at specific aspects of the current  gold and gold stocks markets.

To read the Seeking Alpha article click on Billionaires, Gold And Gold Stocks… They Are In For The Long Term, Should You Be Too?.  This in a way comments on some recent media decrying the idea of following some highly publicised media coverage of some huge investments in gold and gold stocks by some high profile billionaires.  My view is that it’s not too late to follow their example as they are for the most part investing in gold for the long term.  They see a whole lot of factors ahead which will support a rising gold price over the remainder of this year and into the years ahead.

For the Sharps Pixley article click on Reversing gold flows could lead to Perfect Storm.  This article examines the changes in gold flows which have been taking place this year which have seen the main area of demand in the West, rather than in the East which has been the case for the past several years.  This has been due to weak Asian demand coupled with enormous investment demand in the U.S. and Europe exemplified by the big move back into gold ETFs and in coin sales.  It also takes a look at the  recent Swiss data which saw big gold imports from the UAE and Hong Kong – normally major recipients of gold from the Swiss refiners, and a very big export figure for gold into the U.K. – again a huge reversal of the normal flows.  Is this an indicator that London is actually short of unattributable physical gold?

Readers are reminded regarding this latter possible conclusion by my earlier article: Switzerland gold data raises new doubts about London’s Gold Stocks

In my view these are very interesting times for the gold market, which could result in some good upwards momentum, particularly given the recent weak U.S. employment data which could yet again dissuade the Fed from raising interest rates in the near future.  And if and when the Fed does raise rates, probably by a paltry 25 basis points again, should gold investors be worried.  Consider what happened to the metal price when the Fed raised rates in December.  It was closely followed by one of the biggest gold price surges in years rather than knocking the price back as most analysts were predicting.  The weakness in price mostly occurred prior to the event and strength afterwards.

Readers may also want to look at the possible impact of a Brexit should the U.K. public vote to withdraw from the EU in 3 weeks time.  This now looks to be a definite possibility, while only just over a week ago many commentators had virtually written this possibility off as highly unlikely.  There is an underswell of resentment regarding EU membership in the U.K. which only now seems to be becoming apparent.  See: Brits and Europeans may find gold attractive as Brexit possibility looks stronger.

All good weekend reading!

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