Tag: gold

Gold getting fingered

One Rupee coin (dated 1285 AH), 12 ounce silve...

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Gold is down 6.4% to $1,552 an ounce, taking its losses over the past 4 days to 13.8%. It has shed 19% since hitting its intraday high of $1,920 just three weeks ago. Silver is also getting hammered. The metal is down 13% on Monday to $26.95 an ounce, taking its 4-day slump to 32%. Both metals were even lower into the Asian market close.

Investors are scrambling to raise cash across markets and asset classes as traders fret that a lack of progress in finding a solution to contain the euro-zone fiscal crisis threatens the health of the global economy.

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Gold bulls and bubble dynamics

The last bull market in gold began in 1971 with US president Richard Nixon’s closing of the “gold window” and ended in a euphoric blow-out 10 years later. Buying gold in its last parabolic surge proved to be a disastrous decision as the yellow metal then entered a 20-year bear market in which its real price fell 80 per cent. A house can be lived in. Corporate stocks generate dividends. Gold generates nothing and therefore cannot be valued in its own right, only as a measure of revulsion towards other assets. Rather than being a store of value, it is doomed to obey bubble dynamics. When bubbles burst, they usually return to pre-bubble valuations. In 2001, gold was no higher in real terms than in 1972.

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Gold rate touches nearly Rs 25,000

Gold prices rose to a new high in India to over Rs 24,000 per 10 gram, tracking international prices which neared the $1,700 per ounce mark on Wednesday.

While this is good news for investors in the yellow metal, it is bad news for those who are planning to buy gold jewellery.

Over the last one year, gold prices in India have risen by 34%, and this is attributed to the current gloomy outlook for the global economy, the rising inflationary pressure and the weakness of the US dollar against other major currencies like Japanese Yen and Swiss Franc, market players said.

“Gold is usually used as a hedge against weak dollar and rising inflation.”

Gold rate touches nearly Rs 25,000 – The Times of India.

Bank of Korea buys gold for first time since ’97-’98 crisis

The Bank of Korea said in a statement on Tuesday it bought 25 tons of gold over the past two months, raising its gold holding to 39.4 tons, or 0.4% of its total reserves.

China, which ranks 6th globally, the biggest among Asian banks with 1,054.1 tons, equivalent to 1.6% of its entire reserves.

Japan, No. 9 globally, has 765.2 tons of gold, or 3.3% of its total reserves, and 11th-ranked India has 557.7 tons, or 8.7%.

Bank of Korea buys gold for first time since ’97-’98 crisis | Reuters.