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Gold Investments Spell Stability

June 8, 2010 - It is not news that gold investments are steadily on the rise in recent times, especially in the light of the declining euro. If the U.S. dollar is on the rise, it is not good news for commodities, simply because it turns expensive for other currency holders. However, it seems to have no effect on gold investments, in spite of higher dollar rates. Recently, the dollar has certainly fared a lot better than the unlucky euro.

The SPDR Gold Trust, the biggest exchange-traded gold-backed fund, saw a decrease of three metric tons in its holdings last week. Naturally, this saw a change in tempo for the ETF, whose inventories had gone up by 20 metric tons last week. Commerzbank analysts do not foresee any slowing down in gold investments and the demand for the precious metal in the near future.

Rand Refinery Ltd, the biggest processor of gold in the world, reports that sales of the South African Krugerrand gold coin went up by 50 percent within a week. Debra Thomson, the Rand Refinery Treasurer remarks, “Basically the sovereign debt crisis in Europe is behind this. There is a lot of demand especially from Germany; people are looking for gold.”

Austria’s and Australia’s mints also experienced a huge demand for gold coins. According to Ron Currie, Sales and Marketing Director for the Perth Mint in Australia, 69 percent of new gold purchases are from European buyers. This is an increase of 18 percent over last year’s sales. The Perth Mint has doubled its capacity during the last year and a half. <p.Gold investments are clearly on the rise and it comes as no news that gold prices are also on the rise, thanks to the increasing demand.

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info