Translated material
Salvation is gold
Gold rush. Prices for precious metals took off to record heights. By the end of 2010, investors finally lost confidence in paper money and government bonds. And the largest player in the gold market was the National Bank of China. What it turns out for the global economy - wondered the New Times 
On December 7, they gave as much for gold as it has not been worth it since 1983: $ 1432.5 for a trooric ounce.
* * 1 Troika ounce = 31,1035 g. Silver on this day reached a 30-year-old maximum ($ 9044 per ton), Palladium-9-year-old. Investors are looking for any opportunity to transfer accumulations into material values: there are no reliable currencies now. The prospects of both the dollar and the euro do not inspire special optimism. However, a panic flight from banknotes to metals is a doubt strategy. All precious metals are already very, very expensive. Over the past two years, gold rose in price by 60%(from the beginning of this year - by 29%), silver and copper almost doubled, zinc - by 51%.
The flight from pieces of paper in the modern world of the Golden Standard does not work. The cost of not a single currency is not tied to the price of dragmetal and does not depend on the content of gold-serera in coins. But precious metals in the old fashioned the role of "eternal value" play. Investors turn to them when they are not sure of the future value of currencies - for example, in the prospects of inflation or the ability of the governments of the largest countries to serve the public debt. Meanwhile, so far all the countries of the “big seven” (maybe, except for Germany) demonstrate extremely low rates of economic growth, far from pre -crisis.
The traders continue to take care of the European debt crisis, and they find in gold a “safe harbor”, quotes Bloomberg analyst Futurepath Trading Frank Lesha. Last week, the historical maximum of gold coincided with the next local minimum of the dollar (December 7 of the euro was $ 1.33). The more disappointment in the dollar, the more gold purchases.
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| The gold coin of China with the dignity of 500 yuan. Weight - 1 ounce. Gold of the 999th test |
At the same time, experts are warned, those investors who have not rely on dragmetals still can be lost. After all, the gold is already at the maximum, in what paper money it is not evaluated: in dollars, euros, British pounds ... which means that further its price can roll down. This always happens: by the time the bulk of investors realizes that it is time to shift the savings in gold, its price has already taken off to sky -high heights. Those who have been ahead of others, if not for a couple of years, then at least a couple of months feel good.
However, for now, almost any news is working on the further rise in the cost of gold and other precious metals. Does the US Federal Reserve increase the purchase of American government bonds? Investors buy gold: this step of the American authorities sooner or later will lead to an increase in inflation and the fall of the dollar. The budget commission of Barack Obama calculated how to reduce the budget deficit? We buy gold again: the deficit is so large and stable that it will ultimately serve the debt without lowering the cost of the dollar. Investors have lost confidence in Ireland and think which country is the next country, and in the euro zone there is no mechanism of default and the restructuring of the public debt? Salvation is gold: not at the euro to bet! The problems of Britain and Japan (and therefore their currencies are pounds and yen) are not too different from American and European. “There are not a single currency that I would like to hold left with all these problems,” Bloomberg quotes Konnor Nunan, analyst Castlestone Management.
Of course, it would be possible to buy yuan and Chinese debt papers. The Chinese economy even in a crisis grew at the highest pace (about 10% per year), and the prospects for investment in it at first glance are not bad. But not every investor will dare to invest in the currency of the country, which is not quite convertible and the government of which is committed to the values of the market only to a certain extent.
The Chinese factor is not only the exchange players. The world jewelry industry is growing (jewelry is another option for diversification of investments). The demand for gold and from the National Banks has increased, the World Gold Council notes. Especially Chinese - the other day, the Sinhua agency reported that in January -October China imported about 210 tons of gold. This is five times more than for the same period of 2009! “Everyone in the market knew that there was an increase in investment demand for gold, but no one was sure that it was China,” says Jeff Christian, managing director of CPM Group. The PRC policy is clear - not believing in the prospects of the euro and the dollar, the National Bank seeks to preserve savings, buying gold. At the same time, the procedure for the purchase of gold by private individuals and banks is simplified in the Middle Kingdom.
Until now, the gold market in China has been a state - the main buyer of gold was the National Bank. Now the market is gradually “defrosting”, the authorities allow private customers the sale of precious metals. According to the analyst at GoldForecaster.com, Julian Fillips, due to the growth of welfare, the Chinese are now letting up to 40% of their income. Moreover, if earlier they preferred to store their funds on deposits in banks, now they are increasingly acquiring gold. Analysts believe that the Chinese will taste gradually, but their interest in gold is able to ensure a steady increase in demand for many years to come.
It is curious that the Bank of Russia also began to increase the purchase of gold into its international reserves in a crisis - although far from such a scale as China. If in 2007 the share of gold in the reserves of the Central Bank of the Russian Federation was 2.7%, then by December 2010 it reached 7.1% ($ 34.3 billion).
A nightmare on Wall Street Gold has been expensive for the tenth year. This protracted rally cannot be endless. But while investors do not feel confidence in the dollar and euro, they will continue to buy metals, thereby insuring the risk of impairment of paper money, Matthew Zeman, a trader from Lasalle Futures Group, notes. And trust will not be restored until unemployment and the rate of economic growth will return to normal levels.
But it is very likely that this will not happen soon. According to financiers from Pimco, the world has become drawn into a “new norm” (high unemployment, a large budget deficit, low economic growth). If this "new norm" lasts for at least another five years, confidence in paper money will not return. In this case, says economist Danniz Gartman, the editor of the financial bulletin Suffolk, gold will gradually regain the historical role that it played at the beginning and middle of the 20th century, that is, it will become, like an arrow, reserve currency.
In the meantime, Merrill Lynch in his report predicts that in 2011 the price of gold will reach a new record line - $ 1,500. And most clearly the prospects of the Dregmetall market were outlined by PFP Wealth Managment Director Tim Price: “In order for gold and silver to collapse, an unexpected and extremely unlikely mass restoration of confidence in the budgetary and monetary policy of the seven countries, which, like Freddy Krueger, are torn to their own paper. Currencies, prolonging the already prolonged nightmare on Wall Street. ”