Monday, January 11, 2010

Two Commodity Online Articles About Foreign Demand For Gold

The first one, about Middle East demand, is unabashedly optimistic: "Gold demand to rise in Middle East in 2010: WGC." The World Gold Council cited therein is planning to launch a new line of gold jewelry in the region.

The second one discusses PRC purchases of gold, and brings in a blooming trade skirmish between that country and the United States. Noting that an all-out trade war is unlikely, because both countries would be hurt too much, the article concludes with the opinion that PRC retaliation will be more indirect. Stepping up gold purchases is an available option, as it lessens the PRC's tie to the greenback and hurts the U.S. a little by driving the greenback price down. Jeff Nielson makes the case for this occurrence in this Seeking Alpha article, which is referenced by the Commodity Online one. He himself says that the PRC could hurt the U.S. a lot by pushing the greenback down.

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