Gold Buying In India Resumes Because of Inflation Despite Import Tariffs – China’s Economy Heats Up and Takes Silver with It – Latest EU Summit Focuses on Bad Boy Italy – Japan and US Apparent Commitment to Unending QE Powers Precious Metals Onward – South Korea Adds Massively to Gold Reserves in A Tremendous Vote of Great Confidence in Precious Metals – Silver ETF’s Add to Physical Holdings Even as Gold ETF’s Shed Physical Holdings.
Silver posted its first gain in five long weeks in the period that ended Friday, March 8th. After a long, steady, and painful decline that started at $31.82 back on the first of February, silver finally drew a line in the sand at the past week’s spot market weekly close of $28.59.
Silver rallied slightly to $29 this week, at last bucking the downward trend. The fundamental news continues to support silver and gold, with weekly headlines such as gold buying in India continues despite tariffs on the yellow metal.
China’s economy heats up again, the latest EU Summit proves to be inconclusive yet again, Japan and US reaffirm commitment to unlimited money printing, South Korea adds significantly to its gold holdings, and Silver ETF’s show net inflows all catching investors’ attention this week.
Gold Buying In India Resumes Because of Inflation Despite Import Tariffs
It looks like India’s central government attempts to legislate the pace of gold imports into the world’s largest gold consuming nation have failed. Reserve Bank of India Governor Duvvuri Subbarao said that even with their punishing tariffs on gold imports, the high rate of real inflation is causing Indians to buy gold despite this onerous additional tax on the price of the shiny yellow metal. Silver often rises sympathetically with its big brother, and on this point, it was no exception.
China’s Economy Heats Up and Takes Silver with It
China reported economic news early in the week that rocked the commodities markets. They stated that they will initiate a brand new stimulus package in order to maintain the upward trajectory of their economic growth.
They announced an anticipated target of 7.5% economic growth for 2013. This not too shabby goal proves to be a significantly bullish factor for the industrial demand side of silver, as well as other industrial commodities and even world stock markets.
Latest EU Summit Focuses on Bad Boy Italy
All eyes on Europe turned their unrelenting, piercing gaze to the latest EU summit that took place at the beginning of the week. When the heads of state rendezvoused to discuss the latest chapters in the ongoing sovereign debt crisis, Italy took center stage. Their hung government crisis is demonstrating a disturbing lack of commitment to stay on the path of both reforms and painful austerity.
Uncertainty is the mother of all precious metals’ runs, and since there were no significant or new policies announced at the conclusion of the summit, the silver market found plenty of support as analysts and traders watch Italy nervously and continue to bite their nails all the while.
Japan and US Apparent Commitment to Unending QE Powers Precious Metals Onward
If you were hoping that the U.S. and/or Japan would wind up their quantitative easing to infinity agendas anytime, then your faith has sorely been misplaced. Both central banks have indicated that they will press forward with their money printing and currency debasing schemes.
The Federal Reserve released their Beige Book this past week, and it determined that the pace of the so called economic recovery is at best uneven and too slow to adjust the present monetary policy reality.
This simply means that money will continue to be printed by the U.S. at an eye watering rate of $85 billion every month until further notice. Yes, your math is correct. That is an incredible over $1 trillion in NEW US Dollars EVERY YEAR, but only while printing press supplies last, warns referee Big Ben Bernanke.
South Korea Adds Massively to Gold Reserves in A Tremendous Vote of Great Confidence in Precious Metals
As if the recent massive purchases of gold by the one time Soviet Union central banks and neighbors were not enough, another mighty central bank bellied up to the gold bar and ordered drinks for everyone in the house this past week.
South Korea picked up another 20 metric tons of gold in exchange for paper currency reserves during the month of February. The central bank love affair with the shiny metal continues, and this latest massive acquisition brings the South Korean Central bank gold reserves higher by 25% on bargain hunting in gold.
Silver ETF’s Add to Physical Holdings Even as Gold ETF’s Shed Physical Holdings
While gold saw physical holdings in ETF’s like flagship leader GLD decline for the month of February, silver bucked the trend. Silver saw inflows as BNP Paribas reported for the ETF’s like silver ETF name brand SLV.
Silver prices may have outpaced gold’s decline for the month by two to one, but this did not stop the love affair with silver from enduring this Valentine’s Day. Higher physical bullion holdings of silver mean higher prices eventually.
Take Away On Silver Market Prices
They say that you should not fight the U.S. Federal Reserve if you know what is good for you. The same can be said with Central Banks the world over where gold buying is concerned.
While Russia, Kazakhstan, Azerbaijan, Turkey, and South Korea (not to mention China always buying on the down low) are accumulating gold in exchange for Euros, Dollars, and Pounds Sterling at the most aggressive pace in fifty years, you would be a fool to stand in the way of the precious metals freight train that this is bound to leave the station.
Why is that so? The simple fact of the matter is that the central banks have the deepest pockets on earth. Do not fight the central banks where gold and silver prices are concerned. You can not possibly outlast them!