GOLD
Gold is higher in all currencies again this morning and is heading for a second weekly gain in dollars (and other major currencies), as China's imports surged, geopolitical risk in the Korean peninsula remains elevated and uncertainty about the euro, currencies and paper assets in general is leading to continued safe haven demand.

Gold is currently trading at $1,390.30/oz, €1,054.78/oz and £890.30/oz.

Gold has consolidated at these levels and there appears to be strong support at $1,320/oz. Resistance is at $1,400/oz and the nominal high of $1,424.60/oz. It is important to remember that gold remains more than 30% below its inflation adjusted high of $2,300/oz (US CPI) in 1980.

While equity and bond markets reacted positively to the ECB decision to intervene in bond markets, the concern is as ever that this is yet another short term panacea that will simply delay the day of reckoning. Asian indices were mixed as are European stock markets this morning. It is hard to see how the present global financial crisis can be resolved without massive debt restructuring, write offs and debt forgiveness. The alternative is competitive currency devaluations and debasement which will likely lead to stagflation and a remote but increasing chance of some form of hyperinflation.

The level of ignorance regarding the fundamentals driving the gold market remains very high. So called experts continue to say that gold and silver are risky, overvalued and or a bubble based on selective information and assumptions. This is despite gold remaining well below the inflation adjusted high of 1980 and silver at under $30/oz remaining some 33% below its nominal price high of $50/oz 30 years ago.

The future price movement of all asset classes is unknowable - especially in the short term. Given the level of financial, economic and political uncertainty seen today, this is particularly the case. Therefore, real diversification and ownership of a range of quality assets through safe counter parties remains the only way to protect, preserve and grow wealth.

The 'Bloomberg Composite Gold Inflation Adjusted Spot Price' is derived from the monthly U.S. Urban consumers price index.

SILVER
Silver is nearly 1% higher in dollar terms this morning and has risen in all major currencies (see Cross Currency Table). Most analysts have been wrong on silver in recent years and many remain bearish despite the very strong fundamentals.

Silver is currently trading $28.76/oz, €21.69/oz and £18.37/oz.

PLATINUM GROUP METALS
Platinum is currently trading at $1,718.00/oz, palladium at $762.00/oz and rhodium at $2,200/oz.

Courtesy: goldcore.com

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