Greece remains in dire straits as yesterday the Bank of Greece presented its latest January bank deposit data and it showed clear signs of continued bank runs. Data showed a record 12.2 billion monthly outflow of deposits. The total amount of Greek corporate and household deposits has fallen to 148 billion. It’s no secret that Greece is bankrupt and has no ability to pay previous debt as a total default seems inevitable. Greeks continue accumulating gold in anticipation of bank bail-ins and a possible return to the drachma.
HSBC analysts believe gold prices may be beginning to firm as the Fed’s first rate hike may be priced into the markets while the U.S. economy continues to stumble. HSBC say’s Exchange Traded Funds are picking up steam and with Indian imports beginning to recover, gold can hold these current levels on growing consumer demand and moderate investment interest. The Indian government is set to unveil its 2015 budget and gold analysts believe we will see a cut in gold import tariffs unleashing pent up demand from investors. Gold prices in India this week were equal to or $1 an ounce lower than the international market due to slower demand and ample supplies.
The world’s second biggest gold consumer, China, is buying record amounts of gold. Premiums on the Shanghai Gold Exchange were $4 to $6 an ounce higher than the global spot price this week. Chinese gold demand usually weakens after the holiday but this time purchases remain steady as benchmark spot prices test a key level at $1200. China’s gold purchases in January were 76 tons up from 71 tons in December but these figures don’t take into account gold going into mainland China Direct. The actual amount of gold that China is importing could well be 30 to 40 percent higher than what’s being officially reported.
Despite this week’s gains both gold and silver are still well undervalued. Months before April 2011, we saw a $1900 spot on gold and a $50 spot on silver. Since that time global economies including the U.S. economy have deteriorated or at best entered a period of stagflation. Gold and silver are even more valuable today as we move closer to economic distress and possible war with Russia and China. Nations cannot exist on perpetual debt any more than an individual or household.
For those interested in purchasing precious metals or considering a gold IRA, give us call at 1-800-577-3195 for special pricing, Gold Goliath will pay the first year fee’s for clients opening a gold IRA with $25,000 or more.
We are offering special discounts on monster boxes of the 1 ounce Silver Canadian Maple Leaf.