Gold between the hammer price rises and the anvil investment

Gold price technical analysis 30 - May, 2013

Is it time to invest in gold? Is the time is right to do so, or is still time for stocks and bonds? Several questions facing investors, especially small about the best ways to make a profit. Unit questions with increasing remember many depositors in Europe and America what happened to their savings five years ago.

the annoying is a result of the inability of some banks to repay their deposits because of a lack of liquidity is difficult to erase from memory. Consequences were catastrophic for some people who did not find has sufficient savings to enable them to repay the value of the mortgage, prompting banks to book on their homes, and the fate of these “street.” These memories and many of its accompanying economic developments play a prominent role in the gold back to the fore as one of the most prominent forms of investment. Belief in the markets that economic conditions – inflation or deflation – and gold prices reflecting mirrors put each other. Unfortunately, things are not going that way.

Economic developments and changes in the price of gold you need to have some time to catch each other. Global market has been waiting for some time steps of “quantitative easing” by the central banks in the major industrialized countries to pump more liquidity into the markets to alleviate the economic crisis.
Precious metal prices continue to rise, especially with the dollar slipped against the euro. With interest rates remaining at European banks at an all time low, and the absence of any indication that it will be filed soon, it becomes lower interest rate factor encouraging demand for buying gold. The World Gold Council recalls that the central banks at the highest level to buy the precious metal since 2009. Council statistics indicate that the average formal sector demand for gold record in this quarter, an unprecedented rise amounted to 157.5 tonnes, more than twice the rate recorded in the second quarter of 2011 represented 16 per cent of the total global demand. Was boosted by a number of central banks balances of gold during this period, including the National Bank of Kazakhstan and the central banks in the Philippines, Russia and Ukraine. In other words, central banks lose days after the last confidence in euro and the dollar.

If the sovereign debt crisis “Greece – Spain – Portugal – Italy – Ireland” continuing in the euro zone, boosted investor confidence in the importance of acquiring gold savings. The rate demand for bullion and gold coins by retail investors an increase of 15 per cent on an annual basis for up to 77.6 tons, an increase of more than 19 per cent on the quarterly average over five years, which is 65.2 tons. Will gold became a safe haven for governments and individuals alike?. Answers economist Arab in London Marwan Al Asmar for “economic”, saying “I do not encourage investment in gold” and this situation causes he believes “investment in real assets such as farms, for example more useful, prices gold unpredictable, and under the food crisis expected globally, the prices agricultural products may be more profitable. ”

But Marianne Web, editor of Money Week attached to such views in her article about the future of gold, saying “holding gold is the best guarantee in the face of crises than bonds, states go bankrupt, but gold will not get lost value never” and demonstrate Marianne their views reminded readers the incident beginning This year, when the Swiss authorities discovered attempts to smuggle 50 kilograms of gold in a car coming from Italy. So for Marianne gold luster dims, but if that is the situation, why did not achieve gold record prices so far?

Dr. Nasser Qalawun economic expert answers for “economic” to this question, saying, “It is true last year’s forecast was that an ounce two thousand dollars, but that did not happen.”

The logic purely economic, the ounce of gold did not reach for that price because the relationship between supply and demand do not allow this price has pointed the World Gold Council in its report on trends demand for gold that the volume of global gold demand reached 990.0 tonnes in the second quarter of 2012 , a decline of 7 per cent, compared to what it was in the second quarter where he was 1,065.8 tons. Perhaps not allow price rises ounce gold prices expected her, according to Dr. Nasser for the following reasons: “First, the production gold mines and large corporations continuous rates normal, and that the central banks and the World Bank put forward years ago large quantities of gold has reduced the gold reserves necessary to cover the currency, and the repurchase by the central banks for gold is not pace huge. Secondly gold is not the only safe haven, investors turn now to currencies such as the Swiss franc and the Japanese yen and this limited the ability of the precious metal to rise to prices is unprecedented. Finally major investments from by international companies rely on the concept of portfolio diversification Estmaradtha invest in a variety of areas, including gold but it is not the only investment. ”

Gulf and gold

Seems economic integration between the Gulf markets and its global counterpart a clear example in the field of gold. At the forefront of this follow-up consumer and investor Gulf of economic conditions world, especially with the technological breakthroughs available in the hands of many young Gulf investors, investors in Saudi Arabia adopt similar behavior of the global trends as declining investment in the equity markets for the benefit of investing in the precious metal, and increased gold sales in Saudi Arabia about 65 per cent during the past two months.

Under this atmosphere Kuwait and seem to sing out of tune Investing in gold is ranked last among the sectors of investment. Despite confirm a number of economists gold’s ability to absorb most of the available liquidity in the market if the central bank granted the necessary permits for investment by companies and individuals Mstaina experiences of East Asian countries, the procedures have not yet taken to achieve this.