[h=1]Investors clamour for gold[/h]Published 6:18 PM, 9 Aug 2011 Last update 6:18 PM, 9 Aug 2011
QUICK SUMMARY | FULL STORY | COMMODITIES | GOLD
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QUICK SUMMARY | FULL STORY | COMMODITIES | GOLD
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AAP
Investors are clamouring for gold as the price of the precious metal continues to set fresh records, eclipsing the platinum price.
Gold hit a new all-time high of well over $US1,700 per ounce overnight amid fears the world could be slipping back into recession.
Perth Mint treasurer Nigel Moffatt said the gold price overtook the platinum price early on Tuesday.
Gold, an asset that has been recognised for the past 5,000 years, has surged ahead of white metals due to lower industrial demand for platinum and silver, as the global economy slows down.
"Gold is being seen is a store of wealth and is charging ahead whereas the others (white precious metals) are not falling back, but they are not running ahead as fast as gold," Mr Moffatt told AAP.
He said the Perth Mint, a gold refiner and gold investment facilitator, had experienced a 25 per cent surge in retail gold sales in the past week.
One ounce gold coins are flying off the shelves, people are buying into and selling out of the precious metal via the Perth Mint Depository, and some are even selling old jewellery to cash in on record prices.
"The one ounce coin that you bought a year ago in US dollar terms was costing $US1,200. That one ounce coin is now worth $US1,760," he said.
Mr Moffatt said the largest volume growth was being seen in the depository side of the business, which offers allocated and unallocated gold investments.
The former involves the investor taking physical delivery of gold but fees apply for storage and handling, largely related to insurance.
At 1630 AEST, the spot price in Sydney was $US1,747.80 per ounce, and earlier reached a record $US1,771.80.
That is still below the inflation adjusted record reached in 1980 of about $US2,300.
Mr Moffatt noted that interest in gold surged as news reports about the rising gold price increased.
With stock markets around the world tumbling on sovereign debt concerns in the US and Europe, not to mention the spectre of inflation, gold is expected to remain the investment of choice for some time.
At a major mining conference in Western Australia's Goldfields region last week, gold miners said $US2,000 an ounce for gold was in sight by the end of the calendar year.
"If your inflation rate is five per cent and you're getting three per cent on your money in Europe, you've actually got a negative interest rate, so what are you going to put your money into?" Mr Moffatt said.
"It's a big call to put your money into shares at this stage."
City Index chief market analyst Peter Esho said the gold price could continue to rise.
However, he indicated that gold bulls may be getting overexcited, noting billionaire veteran trader George Soros had recently sold out of gold.
"We see gold can possibly go higher, but the incremental returns are less attractive," Mr Esho told AAP.
Mr Esho said City Index was advising investors to consider trading the gold-to-silver price ratio when seeking exposure to the yellow metal.
"This is a ratio that has fluctuated a lot over the past few years," he said.
"It is simply the price of one metal rising against the other, so you can take a view either way."
Silver has run hard in recent years, peaking in April this year when an ounce of gold cost 32 times as much as an ounce of silver.
The gold-to-silver ratio is now 42:1, compared to a ratio of 85:1 in October 2008 when silver was about $US10 an ounce, compared to about $US40 an ounce currently.
Over the past decade, the gold-to-silver ratio has averaged 60:1. Mr Esho said it was a good idea to have gold in an investment portfolio, through stocks, exchange traded funds or other means.
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AAP
Investors are clamouring for gold as the price of the precious metal continues to set fresh records, eclipsing the platinum price.
Gold hit a new all-time high of well over $US1,700 per ounce overnight amid fears the world could be slipping back into recession.
Perth Mint treasurer Nigel Moffatt said the gold price overtook the platinum price early on Tuesday.
Gold, an asset that has been recognised for the past 5,000 years, has surged ahead of white metals due to lower industrial demand for platinum and silver, as the global economy slows down.
"Gold is being seen is a store of wealth and is charging ahead whereas the others (white precious metals) are not falling back, but they are not running ahead as fast as gold," Mr Moffatt told AAP.
He said the Perth Mint, a gold refiner and gold investment facilitator, had experienced a 25 per cent surge in retail gold sales in the past week.
One ounce gold coins are flying off the shelves, people are buying into and selling out of the precious metal via the Perth Mint Depository, and some are even selling old jewellery to cash in on record prices.
"The one ounce coin that you bought a year ago in US dollar terms was costing $US1,200. That one ounce coin is now worth $US1,760," he said.
Mr Moffatt said the largest volume growth was being seen in the depository side of the business, which offers allocated and unallocated gold investments.
The former involves the investor taking physical delivery of gold but fees apply for storage and handling, largely related to insurance.
At 1630 AEST, the spot price in Sydney was $US1,747.80 per ounce, and earlier reached a record $US1,771.80.
That is still below the inflation adjusted record reached in 1980 of about $US2,300.
Mr Moffatt noted that interest in gold surged as news reports about the rising gold price increased.
With stock markets around the world tumbling on sovereign debt concerns in the US and Europe, not to mention the spectre of inflation, gold is expected to remain the investment of choice for some time.
At a major mining conference in Western Australia's Goldfields region last week, gold miners said $US2,000 an ounce for gold was in sight by the end of the calendar year.
"If your inflation rate is five per cent and you're getting three per cent on your money in Europe, you've actually got a negative interest rate, so what are you going to put your money into?" Mr Moffatt said.
"It's a big call to put your money into shares at this stage."
City Index chief market analyst Peter Esho said the gold price could continue to rise.
However, he indicated that gold bulls may be getting overexcited, noting billionaire veteran trader George Soros had recently sold out of gold.
"We see gold can possibly go higher, but the incremental returns are less attractive," Mr Esho told AAP.
Mr Esho said City Index was advising investors to consider trading the gold-to-silver price ratio when seeking exposure to the yellow metal.
"This is a ratio that has fluctuated a lot over the past few years," he said.
"It is simply the price of one metal rising against the other, so you can take a view either way."
Silver has run hard in recent years, peaking in April this year when an ounce of gold cost 32 times as much as an ounce of silver.
The gold-to-silver ratio is now 42:1, compared to a ratio of 85:1 in October 2008 when silver was about $US10 an ounce, compared to about $US40 an ounce currently.
Over the past decade, the gold-to-silver ratio has averaged 60:1. Mr Esho said it was a good idea to have gold in an investment portfolio, through stocks, exchange traded funds or other means.
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