Gold Demand Hits Record Highs

April 13, 2009

As forecast in our previous commentary, the price of gold and mining stocks moved lower over the past 2 weeks. According to the charts below, prices hit support levels on the last full moon and are presently signaling that a reversal is imminent.

The previous retracement in precious metals prices was accompanied by a world equities market rally. Most recently the Dow surged above 8,000 leading many to wonder if the worse of the market correction is over.

The next stage of our long term upwards trend will be seen over the next 2 weeks when precious metals prices advance. We expect to see prices reach new highs as they head to trend resistance levels.

We've seen clear evidence that demand for precious metals is beginning to grow to unseen levels as wealthy buyers are seeking a safe and smart investment:
- US mint spokesperson calls present gold and silver coin demand "unprecedented."

- Russian mints are experienceing record coin demand and Australian Philharmonic coin sales have surged 544%.

- Some analysts believe that present demand is beyond speculation as many wealthy individuals are hoarding large amounts of gold bars.

Besides individual demand, prices will be influenced by central banks as well. As some continue to endlessly print money, others are buying gold. Analysts believe that the IMF's gold sales will have little impact on prices as China, Russia and Japan would be more than happy to buy.

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