Precious metal prices continue to build a base, with increasing evidence of a shortage of physical metal. In London gold forward rates (GOFO) continue to be negative, which means that the market will pay you more interest on your gold than on your dollars.
As the West flees the precious metal, another set of gold buyers has come forward with the aim to preserve wealth. While mining production is around 1,134 tons so far this year, gold delivery on the Shanghai Gold Exchange is 918 tons.
The U.S. dollar increasingly looks like an island of tranquility surrounded by a sea of global instability and uncertainty with the Eurozone once again in turmoil and with concerns over Asia and the Middle East.