Thursday, November 15, 2007

Investors United For Buying

Gold Q3 demand up 19 pct on investment buying

NEW YORK, Nov 14 (Reuters) - Global gold demand in the third quarter rose 19 percent year-on-year to 947.2 tonnes on the back of robust inflows into bullion investment funds and improved jewelry consumption, industry-sponsored World Gold Council (WGC) said on Thursday.

Total gold demand for gold exchange-traded funds (ETFs) for the third quarter surged to a record 138.0 tonnes compared with 19.2 tonnes in the year-ago quarter, boosted by safe-haven investment buying amid credit market jitters, WGC said in its quarterly "Gold Demand Trends."

"Gold demand has definitely benefited in Q3 from the the flight to quality that has accompanied the growing financial problems sparked by the subprime mortgage crisis," George Milling-Stanley, WGC's manager of investment and market intelligence, told Reuters before the release of the report.

"Investors seeking the proven protection of gold as a safe haven was the driving force behind the growth in gold demand during the period," he said.

The increase in investment demand has replaced jewelry buying as the major source of growth for the third quarter, Milling-Stanley said.

So, that being said, one wonders where the media gets the idea that "investors" are selling their Gold in an effort to avoid risk. It would appear to me that "investors" are buying Gold hand over fist in an effort to avoid risk.

I have said repeatedly that it is the "investor" in Gold, seeking to protect and insure his wealth, that will be the major driver of the Gold price as this second phase of the big Gold Bull Market that began in 2001 becomes established now. Phase One, The Speculator Phase, began the day the markets opened following 9/11, and peaked in May of 2006. Phase Two, The Investor Phase, began in October of 2006...and has yet to meet it's midpoint. Gold and Silver are still bargains, even at these prices.

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