In what has been a relatively steady climb over the past few weeks, gold moved back well above the psychological $950 an ounce mark in this morning's trading (over $960 at the time of writing) - the first time in seven months it has achieved this level - while silver was approaching $14 an ounce, being pulled upwards by the gold price. Platinum and palladium were also better as platinum maintained its differential price advantage over gold.
Indeed gold looked poised to move higher still with ETF inflows continuing and a glimmer of renewed demand interest in India as sentiment may be moving towards a growing feeling that the price is poised to increase further. Previously India, the world's largest area of consumption, has seen gold sales and imports at their lowest level for some time with traders anticipating lower prices. Today, though, the gold price in rupees hit a new record at over 15,000 rupees per 10 grams and there has been wide expectation of the price moving to 16,000 rupees in the short term with open interest in metal for April increasing a little.
In the Far East in general there appears to be a movement into gold developing strongly as the stock market continues to drift downwards. The market has seen the dollar price gold consolidating above $930 of late and there has been a strong feeling that the metal is poised to move higher which is now turning into real purchases and becoming reality.
Bloomberg reports that there is also talk of Central Banks buying gold rather than selling . The newswire quotes Steven Zhu of Shanghai Tonglian Futures Co. as saying There's been a lot of talk about central banks buying but they are quiet about it because they don't want to disrupt the market, so the market tends to react when there's some fresh news. There is also a report today that Russia's Central Bank has raised gold's share of its reserves and plans to continue doing so.
To an extent $950 an ounce is seen by some as an important trigger point towards the movement to $1,000 gold and it certainly seems that the momentum is with the yellow metal at the moment. Stock markets remain weak, and in reality there seems to be little but gloomy news ahead. Economies are very definitely in recession and confidence in the dollar is not strong. Gold is increasingly being seen by many as the best way of protecting wealth in the current environment.The only weakness has been the fall-off in demand from the traditionally strong Eastern markets, and if the realisation that gold is more likely to move higher than fall back takes serious hold there then, coupled with the continuing movement by western investors into gold, the price increase could accelerate. $1,000 gold may be with us again sooner than expected and this time there is a growing feeling that it could stay there for an extended period. Virtually no-one seems to be betting against this occurring in the very short term - indeed as momentum builds, which it appears to be doing, there could be an explosive price increase ahead in the months ahead.