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Learn Why Talk Of Stalling Gold Bullion Sales Is Premature With The Help Of

February 22, 2010 – While Andrey Kryuchenkov, an analyst at VTB Capital in London recently said in a report that, “The U.S. currency is also seen as a good hedge against euro-zone risks, especially given the improving outlook for the U.S. economy.” Gold bullion, he surmised, “could well stall here.” With strong fundamentals and continued movement away from riskier assets like the dollar, now does not look like a time when investors are moving away from bullion.

With financial problems in countries such as the United States, Greece, China, England, Portugal and others, many investors are looking for looking for safe haven investments for their assets. While the US dollar demonstrated a certain amount of strength during December and January primarily at the expense of the euro, gold has moved into position to regain its position as an investment hedge.

While the dollar moved from about 74.4 in December to its current position at 80.5, it has been unable to maintain its momentum and hold this level. Gold has continued to climb in recent weeks and its 14-moving average is still well above its 200-day moving average, suggesting that prices are stable and moving upward. These indicators suggest that the dollar is vulnerable to a fall, while gold appears primed to continue its climb.

Gold bullion sales do not appear ready to stall, as AngloGold Ashanti Ltd., the biggest producer of the metal in Africa recently disclosed “talk of significant bar purchases by some of the larger buyers.” This interest in continued purchases suggests that talk of lower bullion sales is premature. Investors should perform their own due diligence and look to make additional bullion purchases in advance of any sustained climb in demand and prices. 

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Jonathan Monroe

Senior Staff Writer -

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