Gold is a puzzle. The latest to try to resolve it is the weekly «il Mondo», which publishes an article signed by Ivan Del Ponte, with a fairly bullish tendency. The experts interviewed by the economic newspaper, in fact, maintain that the current one is a pause and that the price (today around 1,400 dollars an ounce) will rise again. «Although inflation expectations remain subdued, thus reducing the propensity to buy gold, we believe that continued purchases by central banks and strong demand in China and India will offer good support to gold prices in the short term», writes the newspaper, it is contained in a letter sent in April to clients by Paulson & Co., the American hedge fund that predicted the subprime crisis. So far, however, his prediction, or hope, has not come true.
Among those who profess to be supporters of the fate of gold is Simona Gambarini, associate director of research at ETFS Securities, one of the main issuers of exchange-traded funds specializing in commodities. «Various elements must be considered», explains the expert, «such as the high debt of European countries and the USA, as well as the serious precedent represented by what happened in Cyprus, where private investors were forced to cover accumulated losses by the State.” The underlying cause of the sudden decline is not the disappearance of these risks.
Finally, the weekly writes, the decline arose from rumors of the sale of gold reserves by the Cyprus government. This fueled the torrent of supply and once the technical support of $1,500 was broken, a series of so-called stop loss orders were triggered which precipitated the situation. The persistence of risks leads the expert to be optimistic about the safe haven par excellence. In fact, Gambarini argues, what happened was that the physical gold market, where 85-90% of total transactions are carried out, underwent a surge as operators, especially Chinese and Indian ones, went shopping driven by the fall in prices . «Now we are in a situation in which direct investors continue to buy», claims the money manager, «while those who invest in the futures market continue to sell». For this reason the analyst comes to the conclusion that this is an unjustified collapse. «We do not believe that the price will fall below current levels. If it went below 1,300 dollars there would be such a response from physical demand that it would still return to around 1,400-1,450″.
