Gold update 22 May

Gold has had a solid rise over the past couple of week and is up over US$932 at the moment.

This is due to weaknesses in the US dollar and record oil prices.

As Peter Spina, an analyst at GoldSeek.com, puts it: "Capital seeking shelter from monetary debasement will continue to deviate to preservation assets such as gold and silver."

This article also notes that rising fears of inflation have driven up the price.

As we’ve said a number of times on this blog, gold acts as an inflation hedge. There is a pretty lively debate about whether gold or oil is a better inflation hedge. This author examines the arguments and comes out in favour of holding each in your portfolio. No prizes for guessing which side I come down on.

In other gold news. Check this story out. Scientists at North Carolina State University have cut off the ends of a failed HIV drug and stuck the resulting molecules onto gold nanoparticles which then stopped HIV from infecting lab-cultured white blood cells. Interesting.

Gold update 5 May

I’ve had a couple of enquiries about the mid-term trend for gold so I’ve attached a graph showing the price going back to August last year.

Gold has been on a bit of a wild ride recently. It’s currently sitting on about US$863 per ounce after last week reaching a four month low of $845.

We saw a lot of trading in gold when it reached its March peak. Gold’s drop from that high has been driven by profit taking, better than expected employment figures from the US and a slight recovery in the US dollar verse the Euro.

The funny thing is that with gold at a near four month low, many people now say it’s a good time to buy into the precious metal.

On the other hand, as this article says there are still strong selling pressures in the market which could drop the price again.

This article points out we are entering a time of increased physical demand for gold because of the Akshaya Thrithiya festival, celebrated across southern India. It marks the biggest gold buying season outside the post-harvest festival of Diwali in October.

And now for your odd gold news story of the week. If you’re a gold miner who is sick of dark and tight spaces underground, perhaps you could chuck it in and become an ‘urban miner’.

The article says: A tonne of ore from a gold mine produces just 5 grams (0.18 ounce) of gold on average, whereas a tonne of discarded mobile phones can yield 150 grams (5.3 ounce) or more, according to a study by Yokohama Metal Co Ltd, another recycling firm.