Gold shines in Europe
Tuesday, January 27th, 2009
Europeans, with hundreds of years (and wars) more experience than North Americans in weathering the vagaries of financial uncertainty, have driven gold to new highs in sterling (£661.55) and euros (€701.55). (Rubles too, no doubt.) The FT reports.
The total amount of gold held by the world’s gold ETFs last week rose for the first time above the 40m ounce level. Together, such investment vehicles are now the largest holders of physical gold after the official reserves of the US, Germany, the International Monetary Fund, France and Italy.
“The aggressive appreciation in the ETF contracts … is the clearest signal to date this year that gold is one of the limited assets that investors want exposure to during these frantic times,” Ms Tully said.
John Reade, a precious metal strategist at UBS in London, added that the change in ETF gold holdings so far this month, at plus 2.5m ounces, was “impressive”, but he warned that the figure fell short of the 6m ounces achieved in mid-October, following the collapse of Lehman Brothers.
ETF Securities, which provides commodity-based exchange-traded funds, said it saw record inflows last week, with $500m invested in its products in just two days.