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Gold News – Update 5th March 2009

As European equity markets continue to fall gold rebounded and Bullion for immediate delivery rose as much as $8.53, or 0.9 percent, to $915.03 an ounce and traded at $912.01 at 10:01 a.m. local time. April futures added $5.60, or 0.6 percent, to $912.30 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.   Bayram Dincer, a commodity analyst at Dresdner Bank in Zurich has said that while “Uncertainty remains in the market, especially from equities, gold is “still favorable over bonds and equities. At these levels, gold is really a buying opportunity.”

Adding to gold’s appeal is investor fear about future inflation despite Premier Wen of China confirmation that Chinas’s growth target of 8% is achievable without the need to increase its stimulus.  Despite such reassurance assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, held at a record 1,029.29 metric tons for a fifth day yesterday. Holdings in the fund have increased 32 percent since the start of the year.