January 30, 2009

Philippine Bullion Report: Gold up by $20 an ounce


Some of the worst effect of the global economic crisis were experienced this week, including the lost of 75,000 jobs in a single day mostly coming from the semi-conductor industry. Some local manufacturing companies located in the CALABARZON area like Matsushita-Philippines,a subsidiary of Panasonic electronics which manufactures batteries, and Dyna Images located in Cavite halted their operations in a single day.

Employees of the latter were only informed regarding the fate of their company on the day it ceased its operation. Economists are still expecting more layoffs and unemployment in the coming months as the crisis looms over the local economy.

Precious metals were the outstanding performers this week with Gold surpassing the $900 dollar mark while Silver is just a shy away from the $13 level despite of the uncertainty in the price of oil.

Gold futures rose Friday to their highest level in six months as investors sought the safety of the metal following government data that showed the U.S. economy contracted the most in 27 years during the fourth quarter.

Gold for February delivery was last up $19.90, or 2.2%, at $925 an ounce on the Comex division of the New York Mercantile Exchange. It rose to $928.10 earlier, the highest intraday level for a front-month contract since July.

Rising demand for the metal has pushed holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, to a new record level.

The benchmark contract has risen 3.2% so far this week and 4.7% this month.

"Demand remains very high internationally for ETFs, gold certificates and bullion coins and bars," said Mark O'Byrne, executive director at Gold and Silver Investments. We've seen "continuing safe haven demand for gold" due to "sharp deterioration in the global economy."

Spurring the safe-haven moves into gold, the government reported that the nation's gross domestic product contracted at a 3.8% annualized rate in the fourth quarter. That shrinkage is the largest on record since the first quarter of 1982.

Most economists expected that GDP would shrink at a 5.5% annual rate.

However, the decline would have been worse except that the government counts an unwanted buildup of goods on store shelves as growth. Excluding the inventory buildup, GDP contracted at a 5.1% pace. - Marketwatch

The local supply of silver and gold coins have dramatically decrease for the past days due to the increasing demand on bullion coins, as professional investors and businessmen engage into the hobby of collecting coins as an excuse to safeguard their wealth.

Still, the price of coins has not increase yet, though demand have made the inventory of dealers limited to few loyal customers.

1 make comments on this post:

Gold said...

As a person who is very much concern about my gold investments, it is always important to seek updates about world's economic and gold conditions. So, thank you for letting us know about this.

Regards,
Gold Bullion

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