Very interesting Bloomberg piece on Gold and Silver:
“After the worst January for precious metals in two decades, investors still have a $102 billion bet on higher prices, hoarding more gold than all but four central banks and more silver than the U.S. can mine in almost 12 years . . .
The decade-long surge in gold attracted fund managers from John Paulson to George Soros and is now spurring central banks to add to their reserves for the first time in a generation. Once written off as demand for photographic film waned, silver found new uses in everything from solar panels to plasma screens, making it the precious metal most used in industry. As stocks rose 9 percent and Treasuries returned 67 percent since the end of 2000, gold surged fivefold and silver sixfold . . .
The Standard & Poor’s GSCI Precious Metals Index dropped 6.5 percent in January, the most for the month since 1991. Gold traded in London retreated 6.2 percent and silver 9.3 percent.”
There have been 4 bigger monthly slumps for Gold over the past decade, the largest of which was the 34% plunge from March to October 2008. That was followed with a 47% pop.
Gold ETFS now own 2,028 metric tons, worth $88 billion.
Bernanke Bets Commodities Won’t Fan Inflation Concern (Bloomberg)
Investors Have $102 Billion Bet on Gold, Silver Gains
Nicholas Larkin and Pham-Duy Nguyen
Bloomberg, February 7 2010