The Daily Nugget – yet more buy gold ETFs

Yesterday was a pretty good day for the gold price after dropping 1% during the week. It is currently holding steady at around $1,770. The silver price is likely to post a 1.5% loss for the week, its largest since June.

This week has seen gold prices fluctuate between $1,760 and $1,780, it hasn’t been driven out of this range, because, quite frankly it has been a fairly boring week for announcements data, and general global events. Nothing has happened which is significant enough to affect the short-term demand for gold, whilst the long-term demand is holding very strong with increasing numbers grateful they decided to buy gold bullion.

Still more buy gold ETFs

Holdings in exchange-traded products, backed by gold bars, have risen for the 11th day in a row, reaching 2,582.98 tonnes according to Bloomberg. This reflects the faith investors have that the policies announced by central banks in the last month or so will soon come back to haunt them. At present gold is up around 13% from January this year, analysts surveyed by Bloomberg see the yellow metal posting its 12th annual gain by the end of the year. We’re also doing an investor poll on what gold prices will be by end of 2012, so tell us what you think.

The euro made some gains yesterday following the IMF’s assurances regarding both Greece and Spain, the dollar fell slightly from the one-month high seen on Thursday. As the dollar gains strength next to the euro, gains in gold are unlikely to be seen. At present, government released data shows the US performing better than the single currency union. Both are in deep doo-doo, but if you had to pick one currency right now you would go for the dollar, potentially reducing demand to buy gold.

Very little data is set to be released today. In the US, producer prices will be released prior to the estimate of consumer confidence from the University of Michigan. Over in Europe industrial production figures will be released for the single currency area, following consumer price data for Italy.

Lord Helicopter

Last night in London, Bank of England Governor wannabe, Lord Adair Turner, spoke to guests at Mansion House with a government-pleasing speech in which he not only appeared to praise the FSA’s handling of the crisis but he also suggested the Bank of England monetize some of the Treasury’s debt. More on this Zimbabwe economics later today.

He also admitted that the euro had been a bad idea, which he had been wrong to back. Hindsight is marvellous

What would have happened if the UK government had listened to euro-backers when decisions regarding our membership were being considered? Then we would all be in the same boat as Germany and France. Do these bankers, central bankers and government members not realise that hindsight is not a wonderful thing when millions of people are suffering the effects of their thinking that they know better? The euro is just one of many, many bad economic decisions. But it is one of few which we have avoided over recent years. Lord Turner is right to admit he was wrong, but he must learn that the belief that a high power knows best about how to handle the wealth and money of a population, is the same belief that went into causing our crisis and the euro crisis.

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About the Author

Jan SkoylesJan Skoyles is Head of Research at The Real Asset Company, a platform for secure and efficient gold investment. Jan first became interested in precious metals and sound money when she met Ned Naylor-Leyland whilst working alongside him in the summer of 2010. Jan then went on to write her undergraduate dissertation on the use of precious metals in the monetary system. After graduating from Aston University in 2011 Jan joined The Real Asset Co research desk. Her work and views are now featured on a range of media including BBC, Reuters, Wall Street Journal, Mail on Sunday, Forbes and The Telegraph. She has appeared on news channels including Russia Today to discuss the gold price and gold investing. You can keep up with Jan's commentary by subscribing to our RSS feed Gold Investment News.View all posts by Jan Skoyles