Quote from article "In 2008 it took nearly 18 months for precious metal prices to rise to new highs. Equity markets recovered but have simply regained former levels at best. ..................... 'how long will it take for the markets to realize the dangers facing the global economy will make the wealth-preserving nature of gold and silver visible to the bulk of global investors." The answer to that question has changed somewhat since 2008. Since then the emergence of the Chinese and other precious metals investor has jumped significantly as the growth of their middle classes has climbed exponentially. These people are savers of up to 40% of their income and of the total income invest around 7% into gold or silver. This fundamental demand facet is new since 2008. In the developed world, the concept of silver and gold as counters against both inflation and deflation have become more accepted. Non-leveraged investors make up the vast bulk of global investors and recognize the signals given by the markets we now see around us. After their strategy meetings, such risks are factored in and portfolio adjustments made. In the current investment climate, such adjustments are quicker to realize the benefits of precious metals and a larger proportion of the portfolios assigned to precious metals. Heavy falls then give their dealers ideal entry points. Once the traders and speculators have enjoyed the froth in the markets, they will back off in the face of real demand. This will allow the prices to 'floor'. Combine all these factors and you can see that compared to 2008 the time for investment recovery in gold first, then silver, will be a far shorter process than it was in 2008. Gold Bought in Deflation, by Central Banks What is more apparent since 2008 is that precious metals are a haven in deflationary days. Gold is both an asset and cash, around the entire globe. In this global environment with worldwide, web-like, banking systems, gold is the one international item that is an asset to all, free from governments. Gold has moved back to the center of the world's monetary system where banks who are finding it difficult to raise loans at reasonable prices, are using gold as collateral to facilitate. Gold is now a viable, monetary asset and no longer a barbarous relic. The demand from emerging nation's central banks in the last two years has confirmed that. Their buying on the dips, when there are fair quantities to be bought, testify to that. This sort of buying is price insensitive, persistent, and likely to be very much alive with a gold price in these regions. Julian Phillips http://www.kitco.com/ind/AuthenticMoney/sep262011.html
