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June 18, 2010 - Ask serious investors today about where they would put their money —and the answer will be “gold investments.” According to Peter Hambro of Petropavlovsk, physical gold is hot property right now. This is because of a mass preference for gold investments. The gold market has transformed in the last thirty years with investors driving demand. It used to be that jewelry drove the demand, but this has changed over the last year. Now there is feverish demand for bullion and coins. Exchange-traded funds where physical gold backs investor shares are holding record amounts of gold. SPDR Gold Trust’s gold holdings far exceed that of the central bank, standing at 42 million ounces today.

Neil Clift, JP Morgan’s managing director, comments that ten years ago, the bank’s vault held one pallet of gold. However, it is a “different story” today. It is the norm for banks and security firms to build vaults even as the vault’s armored trucks work overtime moving gold. In the month of May, the daily average gold moved by London banks was 24.7 million ounces, a 55 percent increase over April and the biggest monthly jump since 1996 for the London Bullion Market Association.

Gold investments are poised to set higher records in the coming months, according to the World Gold Council. Many analysts see inflation coming for Western economies, even as these economies sink deeper into debt. With gold’s reputation as an inflation hedge, those interested in gold investments are simply working out ways in which they can buy gold at $1,260 before the gold market goes even wilder.

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Stewart Lawson

Senior Staff Writer - Gold-Investment.info