Gold and Silver: The Only Ups in a Down Metals Market

June 17, 2010 – Gold and silver have been the stars of the metal markets the last couple of months. Prices have been hitting new record highs, along with rising demand. For nine straight weeks in a row, the demand for Gold Exchange Traded Commodity stayed up even as investors flocked to put their money in gold and silver as they considered it safer than stocks and other assets. The demand continues in the face of the weak European economy.

ETF Securities recently reported that ETF’s physical gold holdings reached another record high of $11.3 billion. The U.S.-listed ETFS Gold Trust also experienced healthy inflows of $19 million. This proves that European investors are not the only ones who perceive gold and silver as a safe haven against the troubled market scene.

Record highs are not just the domain of gold. Silver is fast catching up, with holdings of ETFS physical silver ETC hitting a record high of $380 million. This increase points to the medium term strategic arrangements being favored by investors.

The fear over the declining eurozone is mainly responsible for the spurt in driving the inflows of gold and silver, with investors desperate to find a reliable alternative to diversify their investment portfolio. Even if investors do not always seek to invest in physical gold, they will certainly favor gold ETCs in the future. According to Wong Eng Soon, investment analyst at Phillip Futures in Singapore, the upside for gold is “still very strong in terms of safe haven flows."

Shannon King

Senior Staff Writer –

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