Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold gained another 0.7%, posting a weekly gain of 4.5%, as growing safe-haven demand drove the closing price to $1,371, the highest in nearly two months. Silver also rallied, tacking on 1.7% today for a whopping 14% gain for the week, its biggest weekly rise in nearly five years. With the Fed's taper of quantitative easing almost certain to begin in September and with Treasury yields already rising in anticipation, investors are rotating from bonds and equities into gold and silver bullion, taking advantage of lower prices to protect their wealth.

QE has fueled superchareged rallies in bonds and stocks by flooding the market with cheap liquidity, driving down yields and promoting risk-taking behavior among investors. The prospect of its imminent reduction is weighing heavily on both asset classes, to the benefit of gold and silver. The S&P 500 suffered its worst week this year while Treasury yields spiked to a two-year high.

Bloomberg reports that gold traders are now at their most bullish since March. Although gold is 30% off its all-time high above $1,921, it has now risen 16% since bottoming in June. Silver has technically re-entered a bull market by rising 24% above its lowest price this year. Platinum and palladium, tied more closely to industry than gold and silver, were mixed on the day but also scored weekly gains. Platinum slipped 0.3% but finished the week 1.8% higher while palladium gained 0.8% today for a 3% gain on the week.

At the Comex close: December gold added $10.10 to settle at $1,371; September silver gained 39 cents to $23.32; October platinum dipped $4.70 to $1,527.60; and September palladium picked up $6.20 to $763.05 an ounce.

Figures released this week by the World Gold Council show that global demand for physical gold and silver is strongly on the rise. Jumping 53% from a year earlier, gold coin and bar investments rose by more than 376 tons to a record 1,083 during last quarter. Gold bullion purchases for jewelry usage jumped 37%, led by record demand in China and India. Meanwhile, the U.S. Mint has sold 31 million Silver Eagle bullion coins already this year, compared with 33.7 million for all of last year, according to Bloomberg.