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Why Gold Prices Are Going Up
Pinnacle Digest writes: In Adrian Ash’s latest article he points to several fundamental reasons why investors should be bullish on gold prices moving forward.
Key reasons favoring higher gold prices:
* ECB cut its key lending rate to a new record low of 0.75% today. It also cut the interest rate paid to commercial banks holding cash on deposit. This creates an incentive for banks to invest, as opposed to hoard.
* The People’s Bank of China cut rates as well today to a 2 year low of 3.0%. China is also the world’s largest gold consumer.
* "Hold tight to gold ahead of QE3 [in the US]," says today's Global Daily Spotlight for clients of investment and bullion bank Société Générale, advising a "Strong Overweight" position in precious metals.
* Bank of England held its key lending rate at a record-low of 0.50% for the 40th straight month. England also extended its QE program by another £50 billion.
* Today Spain sold €3.0 billion in new bonds, paying 6.43% per annum to raise 10-year debt.
* Vietnam has now nationalized its domestic gold bar industry. The central bank of Vietnam is now the only producer of gold investment bars.
Click here to read Adrian Ash’s full article on the subject.