The Maltese seem to be part of the gold rush going on throughout most of the world with people selling their gold to make ends meet and those who can afford it buying it as they consider it safer than any currency given the financial crisis of the last four years. Last year the price of gold hit a record – selling at $1,900 an ounce. Yesterday it was down to $1,585 an ounce as the stronger US Dollar caused a 2.20% drop in price.
Finance Minister Tonio Fenech told parliament yesterday that in the last three years Malta has exported €100,878,326 worth of gold. Asked by Labour MP Charles Buhagiar to give the export figures of gold in the last three years, Minister Fenech gave these figures:
www.dailyfinance.com says that more people have been selling their gold jewellery in the past year, many to cover expenses, others to just to take advantage of record high prices. “Selling gold may be the only chance many Americans have to put a little lustre back into their household finances.”
It gives 6 reasons why the price of gold will remain high:
1. Gold remains a safe haven investment. If the stock market continues its sell-off, gold prices are likely to rise back to record levels as people move out of the equities market.
2. Gold demand outside the U.S. is increasing, especially in the two most populous nations in the world: India and China. With 2.5 billion people between them, their markets for gold are tremendous and growing.
3. Central banks have increased gold buying, which may hit its highest level in two decades. According to the Financial Times, "Mexico, Russia, South Korea and Thailand have all made large purchases this year, in a move to reduce their exposure to the dollar."
4. A number of industries still require gold, among them the electronics, medical and auto industries.
5. The economy is deteriorating throughout the U.S., the EU and Japan. That means holdings in sovereign debt have become more risky. The best sign of this is the loss of America's AAA rating. That means one more asset class has lost some of its safety.
6. Gold is an asset that many very wealthy families use to create a financial and savings buffer. Such high net worth people will probably hold gold long-term because it's one form of "currency" that will always have value. As wealthy people hold gold reserves, supplies will remain tight.