veera
09-13-2006, 12:48 AM
Yellow metal is all set to maintain its head start run reinforced by weakening euro beside technical factors of the recent time and 'Economic Indicators' of different countries.
After the reports of many central banks buying Gold it would be an interesting scenario to watch if anything beside time bound technical corrections due to profit booking, what will trigger the change in swing of upward trend in Gold. Just a realistic fact of market being highly speculative and the logical fact of higher level bringing inbuilt factor of equally potential risk of going towards lower levels doesn't seem to be working for the time now.
Central Banks in Asia including China have given indications of increasing their Gold reserves. All major countries of Asia like India Japan and china have large foreign exchange reserves and the recent rally of Gold have certainly given them a reason for consideration of augmentation in their Gold reserves and this will definitely create huge demand in near future for Gold beside diversification of other investors towards luster of Golden metal in their portfolio.
If these tacit assumptions from Asian countries were to happen then the 10% diversification of foreign exchange reserve will generate demand in Gold of approximately 350 million ounces, which itself is sufficient to meet the supplies for coming 2 years of Gold production at increased capacity of production.
Also due to agreement of European central banks in which it was agreed to sell a maximum of 2,500 tonnes of Gold during the five-year period but not more than 500 tonnes each year during the agreement, there is sentiments of discouragement in central banks of other parts of the world and it will affect the demand of Gold as non European banks would like to increase their Gold holdings significantly in respect of commercial sense to earn.
The effect of Gold's bullish run is also being observed in domestic market as common investors are also ensconcing with Gold thus resulting additional demand in retail sectors and following the current international trend.
It won't be too early to say if these vibrating economic indicators are in fact chanting the secret mantra of Gold's mystical run towards four-figure mark in near future.
Finance Hound
http://financehound.com/
After the reports of many central banks buying Gold it would be an interesting scenario to watch if anything beside time bound technical corrections due to profit booking, what will trigger the change in swing of upward trend in Gold. Just a realistic fact of market being highly speculative and the logical fact of higher level bringing inbuilt factor of equally potential risk of going towards lower levels doesn't seem to be working for the time now.
Central Banks in Asia including China have given indications of increasing their Gold reserves. All major countries of Asia like India Japan and china have large foreign exchange reserves and the recent rally of Gold have certainly given them a reason for consideration of augmentation in their Gold reserves and this will definitely create huge demand in near future for Gold beside diversification of other investors towards luster of Golden metal in their portfolio.
If these tacit assumptions from Asian countries were to happen then the 10% diversification of foreign exchange reserve will generate demand in Gold of approximately 350 million ounces, which itself is sufficient to meet the supplies for coming 2 years of Gold production at increased capacity of production.
Also due to agreement of European central banks in which it was agreed to sell a maximum of 2,500 tonnes of Gold during the five-year period but not more than 500 tonnes each year during the agreement, there is sentiments of discouragement in central banks of other parts of the world and it will affect the demand of Gold as non European banks would like to increase their Gold holdings significantly in respect of commercial sense to earn.
The effect of Gold's bullish run is also being observed in domestic market as common investors are also ensconcing with Gold thus resulting additional demand in retail sectors and following the current international trend.
It won't be too early to say if these vibrating economic indicators are in fact chanting the secret mantra of Gold's mystical run towards four-figure mark in near future.
Finance Hound
http://financehound.com/