Precious Metals Consolidate Their Market Position

June 15, 2010 - Not long ago, the euro pushed precious metal prices higher, driving investors to put their money in gold, silver, palladium and platinum in the belief that precious metals are a safe haven. Rightly so, since gold prices hit an all-time high last week, even as silver rose steadily.

On June 15, as Moody’s cut Greece’s government bond ratings to junk status, reviving the fear about the Greek situation’s effect on the world economy, investors once again turned to precious metals. All indices are up at midday at least one percent. Not surprisingly, gold prices stayed firm in Europe today. As spot gold bid at $1,223.65 an ounce as against yesterday’s $1,220.15 in New York, U.S. gold futures scheduled for delivery in August stood at $1,224.90.

David Wilson, analyst at Société Générale remarked that it is obvious that investors will continue to support gold, considering their nervousness over the European economy. He also said that precious metals would see new highs as the year 2010 progresses. Last week, gold set a record high at $1,251.20 an ounce.

The demand for physical bullion resulted in a record holding of 1306 tons of precious metal gold at the world’s biggest gold-backed ETF, SPDR Gold Trust in New York. According to market analysts, the outlook for precious metals looks very positive if one were to go by past price reports. Silver currently stands at $18.31 an ounce and the gold-silver ratio, which stands now at 66, is gradually increasing. Platinum prices are at $1,550 an ounce.

Thus, investors continue to be interested in gold as a safe investment in the medium to long-term to guard themselves against the impending inflationary government methods to deal with debt.

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Danny Burns

Senior Staff Writer - Precious-Metal.org