SWOT Analysis: Central Banks Continue Gobbling Up Gold

(Before It's News)

Be prepared for the next great transfer of wealth. Buy physical silver and storable food.

news.goldseek.com / By: Frank E. Holmes / 16 February 2016

Strengths

• The best performing precious metal for the week was gold, up 5.46 percent.  This follows 54 tonnes of gold ETF purchases in January.  Central banks in the fourth quarter increased their demand for gold by 25 percent, according to the World Gold Council, as a haven from oil’s slump and concerns about a stumbling economy, as seen in the chart below.

• The Economist calls gold’s surge past $1,200 an ounce this week a “hedge against ignorance,” pointing to question marks hanging over the global economy, some of which include China’s economy, falling oil prices and the fragility of global banks. Even as gold prices fell on Friday, the metal headed for its biggest weekly jump since 2011, reports Bloomberg.
• Tahoe Resources announced its definitive agreement this week to acquire Lake Shore Gold. TD Securities reports that the offer represents a 14.8 percent premium to the closing price of Lake Shore shares on Friday and a 25.7 percent premium to the 20-day volume weighted average price (VWAP) for the period ending Friday.

Weaknesses

• The worst performing precious metal was palladium, still up 4.26 percent for the week.  Palladium is likely being pulled up with spreading interest in precious metals to hedge general market risk.

• It seems that even gold bulls failed to imagine just how much the precious metal could soar this year, reports Bloomberg, adding that gold prices have surged past three-quarters of the peak forecasts in a mid-January survey by the London Bullion Market Association. In another article entitled “Gold’s Monkey Magic Seen Fading after Biggest Advance Since 1980,” Bloomberg reports that 12 analysts surveyed believe gold will drop this month as Chinese consumers slow purchases that surged before the start of the Lunar New Year. Prices could drop to $1,100 an ounce from Monday’s $1,200 high, say seven additional analysts providing forecasts.

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