Gold & Silver Bullion

Gold Is the Best Performing Asset Class
Mineweb
Over the most recent ten year period, in UK terms gold has outperformed its nearest competitor (bonds) by over 240%.  As investors have paid the penalty for increasing risk exposure over the period, the presence of gold in a portfolio matrix has boosted returns into positive territory.  Meanwhile ETF investment outstripped coin and bar demand last year. At a recent presentation the senior analyst at ETF Securities produced a series of analyses that underpin gold’s role as a hedge against risk and he was able to show that, not only has it been a hedge against risk in the recent – and medium term – past, it has for much of the time been the strongest performing asset class. One of the quotes that ETF Securities likes to use regularly is this from Federal Reserve Chairman Bernanke; “Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars it wishes at essentially no cost”. 
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Gold Prices Correct As Equities Pare Gains
The Street
Gold prices have been firming as equity markets has begun taking back earlier gains while investors assess Thursday’s mixed earnings reports and better-than-expected fall in initial jobless claims. Kitco’s Jim Wyckoff attributes the steady to firm prices to “a corrective bounce and consolidation from solid losses absorbed on Tuesday,” when consumer confidence numbers came out looking glum. He also noted fresh buying from bargain-hunters since Tuesday’s losses. Gold for December delivery is rising $5.10 to $1,167.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,172 and as low as $1,161.60. The U.S. dollar index is falling 0.7% to $81.62 while the euro is rallying 0.7% to $1.31 vs. the dollar. The spot gold price Thursday is trading sideways, according to Kitco’s gold index.
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Hoping for a Break
GoldSeek
I want to discuss something that came up on the blog Friday.  An anonymous poster hinted that we were going to see more gold weakness in the days ahead because big money had to sell their positions.  Folks, big smart money traders don’t sell into weakness.  These kinds of investors don’t think like the typical retail investor who is forever trying to avoid draw downs.  Big money investors take positions based on fundamentals and then they continually buy dips until the fundamentals reverse.  The fundamentals haven’t reversed for gold so I’m confident in saying that smart money isn’t selling its gold, it is using this dip to accumulate. With that being said, there are times when big money will sell into the market and it is why so often technical analysis, as it’s used by retail traders, doesn’t work.  They sell into the market in order to accumulate positions.  Let me explain.
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High Gold Price Boosts India Silver Imports
Commodity Online
Industrial demand for silver remains weak and thus the price has failed to deliver on high hopes earlier this year; the price has rather followed the ebbs and flows of investment demand, in much the same way as gold over the past several weeks. In fact the silver price had slightly underperformed gold, down 2.4% from the end of May through to July, compared with the 1.3% fall in gold; the gold: silver ratio has nudged up to 66-67 in early July, from less than 65 on 23 June. But although weak, demand has been improving in H1 2010. Chinese imports of silver, for example, have risen year-on-year in each month since November 2009, although the figures are skewed because of the deep recession that year. May’s imports were 482.9t, up 72% on the same month in 2009, but importantly are also up on the same month in 2008 – before the full extent of the financial crisis became apparent. In the first five months of 2010, imports stood at 2176.5t, up 52% on the same period in 2009.
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Gold at Long Term Trend Support
Minyanville
Gold is now reaching long-term trend support after falling the last few weeks as investors returned to bid up the euro and equities. The bounce in equities, especially financial, retail, and real estate, may be short-lived as volume indicates that there’s not much conviction from major investors on the upside. Gold has recently been the safe haven as investors sought shelter away from the euro when it was having sovereign debt issues. Now that those issues have been quelled, gold has had some selling and has now reached an oversold condition and a long-term trendline, which is acting as major support. Stock prices move in trends. In a bull market, it’s quite often easy to identify the ascending bottoms. Being familiar with trendlines allows the investor to enter long-term bull markets when they’re oversold and at key support.
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Use This Correction to Rethink Gold
GoldSeek
Have you “rethought” your gold? That’s what Phil Smith at Reuters Technical in Beijing thinks is going on in gold. Smith says, “Gold seems to be undergoing a rethink by some investors after its huge rally over the past years.” After all, gold prices haven’t hit an all-time high in nearly an entire month and it up and unsustainable 25% in the past year, day traders telling themselves their investors that who are looking for a quick ride in gold naturally get a little scared when one of the world’s most volatile assets loses 8% in a month. It all seems a bit preposterous in reality, but it does signal something really interesting going on in gold. It’s something that is helping to create an even bigger opportunity in gold than most investors expect.
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