American Bullion -- Time To Buy Physical Gold

Friday, February 05, 2010 at 12:00pm

Following the release of US payrolls data, Gold bullion prices recovered on Friday to turn positive as the euro moved up from its weakest position since May 2009. The U.S. unemployment rate caught everyone by surprise when it reportedly fell to a five month low of 9.7 per cent. Factory payrolls showed growth for the first time since 2007 even though the economy lost 20,000 jobs.

India's buying of gold continued on Friday helping to stabilize the price of gold bullion. On Thursday bargain hunters were buying gold bullion at prices not seen in several months. The World Gold Council said earlier this week that investor flows from western markets had provided key support during the credit crisis in helping to protect their wealth against market shocks.

They went on to say that these flows have remained even as the global economy has shown signs of recovering. Europe's deepening debt crisis has kept pressure on the euro for several months now, and was the main topic on Friday at the G7 meeting of finance leaders in the Canadian Arctic. Canadian Finance Minister Jim Flaherty, host of the top level meeting, speaking to reporters before the meeting, said G7 officials were already discussing the European debt problem.

He said they were particularly concerned with the situation in Greece. He went on to say, "I think we have to be very mindful of the potential failure of domestic economies and of the persistence of some toxic assets in some banks." With uncertainty in the global currencies, and a new report out by Citigroup Global Markets analyst Alan Heap about Chinese and Indian central banks being extremely underweight in gold, with only 1.5 per cent and 4.1 per cent of their total reserves in gold bullion, whereas, European banks are weighted typically above 50 per cent, It is times like these that smart investors are increasing their positions in physical gold.