KLAPWIJK SAYS SILVER TO TOP $50 BY END OF 2012 YEAR
Gold prices are lower on the New York Spot Market as investors moved out of stocks and commodities following a warning from Fitch Ratings. Fitch cautioned that U.S. banks are at risk of contagion if the crisis in the Eurozone continues to worsen. The strength of the U.S. dollar has been putting pressure on gold prices this week.
The latest data from the World Gold Council shows demand for gold grew 6% in the third quarter of the year with investment demand up 33% while demand for bars and coins grew 29%. The crisis in the Eurozone boosted physical demand with the largest percentage of purchases coming from Germany. Total physical demand from Europe increased 135% from last year. (The Street, 11/17/11)
U.S. stocks remain volatile amid the latest worries about the Eurozone, but the latest data on the health of the U.S. economy provided a glimmer of hope for investors. Today’s release of government data on unemployment and construction topped forecasts, but the warning from Fitch on the risk of contagion from the Eurozone has kept markets depressed. The latest turmoil resulting from rising bond yields in Europe has raised speculation the European Central Bank will take further action to stabilize bond markets. "There continues to be the chance that the whole thing unravels," said Kate Warne, chief investment strategist with Edward Jones. "But policy makers are clearly moving in the direction of taking steps they never would have imagined to support the euro." (CNN Money, 11/17/11)
Philip Klapwijk of GFMS told investors in a speech before the Silver Institute in New York City that conditions for the next year are likely to remain supportive of continued growth in silver investment. According to Klapwijk, "Investor interest remains strong due to a favorable financial backdrop and in spite of two major sell-offs.” Klapwijk forecast a silver prices of $35-$40/oz. through the end of the year and prices above $50/oz. by the end of 2012. (Mineweb, 11/17/11)
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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