Gold ETF holdings begin to climb again as price strengthens

With the gold price moving back over $950 late last week, and stock markets showing renewed signs of weakness, safe haven buying of gold is back in vogue.

LONDON - 

With the gold price moving back up over $950 again late last week, some analysts see the metal price poised for new heights - and there is now evidence that investment interest in the metal, which had been fairly static for the past month may be beginning to rise again.  There has also been some recovery in Indian gold imports but there are also fears that these could fall back again with the latest price rise as these have proved to be fairly price sensitive over the past few months.

The revival of active investor interest is shown by a 13.14 tonne  increase in the holdings of the SPDR Gold trust - the world's largest gold ETF.  The holding now stands at 1,118.76 tonnes as of Friday, after showing very little movement in either direction since April 17^th.  While the holding is still some 8.92 tonnes below the 1,127.68 tonne record recorded on April 9^th, there is the strong possibility that it will attack this level again given the resumption of further economic gloom after a few weeks of possibly undue optimism.

Today is a holiday in the U.S. and the U.K. so activity in world stock markets will be muted, but all eyes will be on the London and New York stock exchanges when they reopen tomorrow to see if the late week downturn of last week will continue and bring more people to believe that the recent market rises are over and a continuation of the bear market lies ahead, prompting further safe haven buying of gold.

Silver too has been benefiting despite its heavier proportion of industrial usage.  It is seen as a much cheaper way of entering the precious metals investment sector as the price does tend to get dragged up by that of its sister metal and also tends to be more volatile.  At the time of writing silver is at $14.65 an ounce - a little down from a $14.84 brief spot peak reached on Friday.

A number of economists are pointing to parallels with the Great Depression and the more recent Japanese deflation which show, that if history does repeat itself, markets could continue to fall for a very long time and there is also evidence that with the Chinese and Russian Central Banks buying gold, and western Central Banks loath to sell, that this will help underpin gold and silver prices.  Interesting times!

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Related Links ARTILCES:  Gold strong, silver stronger as dollar continues downward path  Gold continues its rise on weak dollar and short covering   Gold finding support at prices around $900   Gold price braces for return to long upward march  OTHER PAGES:  GOLD NEWS EUROPE AND MIDDLE EAST

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