The mood this morning in Perth was bullish to say the least, with one
client buying $1 million first thing Friday. That is what a price move of
$200 per ounce or nearly 20% does in the space of a month and a half.
After touching $1,050 and wallowing below $1,100 for much of December,
"goldbugs" felt they may be getting some long overdue reward for
their patience during January as gold broke through the $1,100 level. So far
February has exceeded expectations with gold first running up to touch $1,200
and then last staging a significant move of just under 5% to $1,260 before
settling down to just under $1,240.
For The Perth Mint trading has been strong all this week, with more
interest in gold than silver - gold sales are up 4 times compared to 2 times
for silver, week-on-week. Our dealing desk says the mood is one of panic
buying, primarily in response to falling stock markets. On the wholesale
side, our German distributors are seeing continuing interest in silver and
willing to take any silver they can get across our range.
Even if gold's recent move has been too fast and it is due for a breather,
it is clear market psychology towards gold and silver has changed. Confidence
among many analysts is building that gold bottomed in December at $1,050. If
gold can hold about $1,200 over the next week then the recent LBMA precious
metal forecast survey average of $1,103 is looking very conservative
indeed.
