Massive Gold Storage Facility Opening In China
July 27, 2012
By James O'Dell
July 27, 2012, Los Angeles – The price of Gold held above the $1,600 an ounce level on Thursday, rising 0.69 percent or $11.10 to close at $1,615.20 an ounce, after European Central Bank (ECB) President Draghi promised to do whatever it takes to keep the eurozone intact. The price of Silver climbed 0.66 percent or $0.18 to close at $27.49 an ounce, while the Gold/Silver ratio, the number of ounces of Silver it takes to buy one ounce of Gold, inched up to 58.76, as Silver under-performed Gold.
"Yesterday's move above $1,600 an ounce was driven by more positive sentiment towards Gold on the back of growing anticipation for QE," said Anne-Laure Tremblay of BNP Paribas. Gold will soon be acting as a safe-haven asset once again, says Edel Tully, of UBS.
Moody’s downgrade of its outlook for Germany, Holland and Luxembourg “effectively reduces by 50 percent the global pool of sovereign bonds with AAA ratings and stable outlooks from all three major agencies. This means that there are a lot fewer options for investors seeking to put their money in quality assets. The dwindling list of quality investment alternatives should be good for Gold,” said Tully.
Meanwhile, U.S. gross domestic product data for the second quarter of 2012, is scheduled for release on Friday and the results could influence the price of Gold, says James Steel, of HSBC. Analysts expect the data will show the U.S. economy grew at just a 1.1 percent annualized rate, well below the 1.9 percent rate in the first quarter, according to HSBC, while Fed officials expect growth to come in between 1.9 percent to 2.4 percent.
“If the growth rate for Q2 is nearer to 1.0 percent … the FOMC may move closer to a decision to provide even more monetary stimulus in the weeks and months ahead, noted Kevin Logan, of HSBC. "Gold has shown itself sensitive to monetary policy announcements this year and any indication of further easing would buoy Gold prices, we believe,” said Steel.
In Asia, due to the rising demand for storage of the vast quantities of Gold now being imported and produced in China, Hong Kong will be opening its largest Gold storage facility in September. The massive facility, located at the international airport, has the capacity to securely store 1,000 metric tons of the yellow metal, that's nearly one-fourth the amount of Gold bullion now being stored at Fort Knox. Don't leave your assets unprotected during these times of economic and geopolitical uncertainty, invest in physical Gold and Silver bullion and protect your wealth.
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