World gold markets finished the week in line with each other [Shanghai, London and New York] at around $1,235. The consolidation below $1,250 continues as this overhead resistance at that level sees a build-up of a foundation around $1,240. Exchange rates have been a large influence this last week as gold in the euro advanced and in the dollar weakened at one point.
What does appear to be happening is that uncertainties across the world are worrying investors and they are being seen to favor gold investments. Here we are talking about directly held gold bullion under the control of the investor, not ‘electronic gold’. This demand is growing, as reported by our friends in Swiss refineries, etc, who continue to be going flat out refining gold into metric formats for trading in markets in Switzerland and eastwards. It is most enlightening to hear that such Swiss gold people are not at all happy to receive dollars in payment, only euros or Swiss Francs. This tells quite a story!
With even Blackrock recommending gold in portfolios we expect more U.S. buying to follow in gold.
One of the most difficult features of financial markets today is the demand for short term performance even within monthly time slots.
Gold has always been for the long term outperforming all other investments over that time, but in the world today it’s the fund manager that meets trading demands that is deemed the best manager. Indeed, we have always seen that the best portfolio manager is measured over the medium to long term and is not a trader. Warren Buffett backs that and proves the point.
We have absolutely no doubt that if you measure gold from today over the next five years or longer, gold will outperform all other investments. Look back over the last decade and we prove our point.
Having said that, we expect to see gold, from today to the end of the year, likely outperform all other investments. Even Alan Greenspan has recently stated that gold is the ultimate insurance policy.
This seems more than appropriate in a world that is moving from dollar hegemony to a multi-currency monetary system as ‘popularism’ is spreading across the developed world. With French and German elections pointing towards change and an E.U. that Greenspan says is ‘not working’ gold seems to be a safe place to weather coming storms…