During the first nine days of February 2010, the United States gold prices have varied from around $1,115 per ounce at the beginning of the month to $1,076.70 per ounce at the close of trading on February 9, 2010. This represents a short term decline of about $40 per ounce or 3%.

Notable Articles on Gold Bullion

BusinessWeek.com: “Gold May Drop to $1,025, Commerzbank Says: Technical Analysis”

According to Commerzbank AG, gold prices have been declining for the past four weeks, and these declines may extend to $1,025 per ounce. On February 5, gold reached a 3 month low of $1044.85 per ounce with a strengthening U.S. dollar and European budget deficits that have been expanding. These expanding deficits could slow Europe’s economic recovery.

See: http://www.businessweek.com/news/2010-02-09/gold-may-drop-to-1-025-commerzbank-says-technical-analysis.html

BusinessWeek.com: “Gold Declines to Three-Month Low in London as Dollar Rallies”

In London, England gold prices were at their lowest in three months as the U.S. Dollar gained momentum, which caused people to lose interest in gold as an alternate investment vehicle. The U.S. Dollar Index, which gauges the U.S. Dollar’s strength based on 6 other currencies, was at a six month high on February 5. In general, people do not feel safe with the euro. The reason is that Greece, Spain and Portugal have budget shortfalls that are out of control. In Spain, the recession has been ongoing since the second quarter of 2008, and real estate prices have been falling there.

See: http://www.businessweek.com/news/2010-02-05/gold-declines-to-three-month-low-in-london-as-dollar-rallies.html

Wall Street Journal: “Bullion Management Group Launches New Physical Gold Fund”

Bullion Management Group (BMG) launched a new fund this week called the BMG Gold Bullion Fund, which invests solely in solid gold bullion. The BMG Gold Bullion Fund is an open-end mutual trust available for redemption daily.

See: http://online.wsj.com/article/BT-CO-20100208-710872.html

Wall Street Journal: “New Metals ETF Planned”

ETF Securities USA asked the Securities and Exchange Commission (SEC) to allow it to lauch a new U.S. exchanged-traded fund supported by solid gold, platinum, silver and palladium. The price for precious metal could go up if ETF Securities USA is allowed to launch the above fund, which would go by the name ETFS Physical PM Basket Shares. According to ETF Securities USA, shares of the named fund are designed to be an inexpensive and easy way to invest in bullion.

See: http://online.wsj.com/article/SB10001424052748703630404575053921170488254.html

COMEX: Gold Down to $962.50

Gold is down approximately 2% in trading today, and reaching down toward $950. After having risen nearly a full hundred dollars in May, this weeks decline seems to indicate the market’s reluctance to see gold rise above the $1,000 barrier.

This end of the week’s decline comes as the result of larger funds taking advantage of the recent rise in gold values to thin out their inventories, and the recent change in the strength of the dollar.

However, with the rising concern over inflation hovering on the horizon, this price correction doesn’t seem to be anything other than in reaction to the short-term profit taking resulting from the recent steep incline in the price and the repositioning of portfolios which given the rise were seen to be overly heavy in precious metals.

There appears to be a unsure carrying on over the preceding month between the powers proclaiming a nascent economic recuperation and those that believe there is still a longsighted road of economical contraction and expanding unemployment still ahead. Reality be told, gold is expected  to shine regardless however this finally runs down.

Gold bears  remarkable resilience over the past year, despite claims from some quarters that broad-based deflation was expected to weigh on all commodities including the resilient gold. We on the other hand have systematically maintained that the major economic forces in the world were just not going to let that befall.

Through monolithic fiscal stimulus package, close to  zero interest rates, bailouts and assorted liquidity strategies, the global economic system is awash in currency. This isn’t to say we are out of the woods as yet, simply if things take another turn for the worse, monetary authorities around the world will once more address whatever means are at their disposal to prevent a deflationary spiral.

For those countries with rates of interest at or near zero percent, there’s not much more they can do on that front. All the same, when it comes to printing money and funneling into the economic system, they really have no boundaries. But, there are consequences.

In the US and UK, the governments have turned to quantitative easing as a means to force back the effective borrowing rate lower still. In fact, a recent study by the Fed learned that an appropriate interest rate based on unemployment and inflation would be -5.0%. Other countries are thinking over similar unconventional policies.

Their goal is to produce an environment conducive to the antithesis of deflation, which naturally is inflation. Be assured, they’ll accomplish that goal.

Are the economies of the world bouncing along a bottom at this point, or is this merely a brief respite before the next round of awful news? Most traders will assure you that picking bottoms is a fool’s game. I agree, and I believe you can employ that same thinking whether your talking individual stocks, commodities, gold or macro-economic trends.

Physical gold is going to continue a critical factor in the modern portfolio in either case. If the global economy does carry on to contract with even higher unemployment rates still to be seen — and all the damaging implications of that — gold will proceed to serve as significant diversification versus the more traditional asset classes that would suffer under this scenario.

This scenario also puts the banking industry under considerable extra pressure, maybe even beyond the worse case scenarios of the much discussed bank stress-tests. Gold provides protection against the possible reemergence of broad-based systemic risks.

On the other hand, if the economy is indeed on the mend — as the stock market seems so desperate to prove — gold will once again reestablish itself as the classic hedge against inflation.

We’ve seen inklings of that this week when both stocks and gold have rallied in tandem. Suggestions of recovery, be they false or not, are going to bring the specter of inflation back into the investor’s awareness.

Upon recuperation, whether it’s happening at once or whether it does not happen until the following year as most economic experts believe, there is simply no way for all the liquidity to be drained out of the system quickly enough to prevent substantial inflation. Of course the government will not risk constraining monetary policy too soon, raising the risk of hyperinflation as they wait to be sure a recovery is afoot.

The funds may already be trying to front run confirmation of higher inflation, building positions in gold under the assumption that their risk is restricted even if they are ultimately proven wrong. Gold will then be supported by resurgences in risks to growth and systemic risks.

Not a bad scheme, with gold still well over a $100 off the all-time highs. By the time we see that first big jump in CPI or if some other big risk event — and there are enough out there — turns things the other way, gold may have to be purchased at much higher levels.

Palladium, not to be confused with platinum, is one of a group of white precious metals that can be used for a variety of commercial applications (i.e. computers, mobile phones, dentistry, medical equipment, fuel cells) as well as in the manufacturing of beautiful pieces of fine jewelry. Most palladium today, however, is used in the manufacture of automobile catalytic converters.

Palladium, named after the asteroid Pallas, was first discovered in 1803 by William Hyde Wollaston. Palladium is a rare metal with the largest deposits found in South Africa, Montana, Canada, and Russia.

The first recorded use of palladium in jewelry was in 1939 as an alternative to platinum or white gold. This precious metal provides the contemporary look of a white metal. Unlike white gold, palladium is naturally bright white and its color will never fade. Palladium has a low melting point but becomes very strong when cooled, making it a good alternative to softer white metals. It can be hammered into very thin leaves just like gold, and can, in fact, be used in the production of white gold.

Palladium offers many of the desirable traits of platinum at a terrific price, considered a fashionable, affordable choice for custom jewelry. The metal is 40% lighter, harder and less expensive than platinum and provides a hypoallergenic metal suitable for those with nickel sensitivities.

Until recently, the use of palladium in jewelry has been limited due to the difficulty of casting this metal. Recent advances, however, have produced a new alloy of palladium that is perfectly suited for jewelry manufacturing, offering consumers an ideal substitution for platinum at a reasonable cost. The most common combination of the metal is 95% palladium and 5% ruthenium, known as 950 Palladium.

Palladium settings are preferred over gold for extra large diamonds and gemstones, since the metal is more durable than gold and less likely to incur damage during every-day wear. Many customers who opt to wear their fine jewelry selections daily prefer the lighter feel of palladium. Larger earrings and necklaces made of palladium can be worn comfortably all day.

If you have found that you are allergic to other types of metals, you may find that palladium is just what you have been looking for. It is a hypoallergenic metal, meaning it won’t leave you itching or with a rash where it touches your skin. Since many pierced earring wearers are especially sensitive to some metals, finding studs, hoops and posts that are made of palladium can truly make wearing earrings fun again.

The Chinese have historically been the biggest buyers and producers of palladium jewelry. However, the advances in palladium casting techniques and recent escalation in gold and platinum prices are driving an increasing demand for palladium fine jewelry around the world. The demand is expected to continue to increase as many consumers discover the beauty, durability, and lightness of this lustrous white precious metal. As a result, there is an increasing availability of palladium jewelry in jewelry stores around the world, especially wedding bands and engagement sets, in jewelry stores around the world.

Amy Carrington is a fashion maven and editor at www.SorellaJewelry.com. Sorella Jewelry Studio creates elegant and original personalized jewelry with the names, words, dates and Chinese symbols that matter to you.

For serious investors looking to purchase gold bullion, coins often yield higher returns than gold bars. The main reason is that gold bullion coins carry intrinsic value beyond their carat weight and gold content. Gold bullion coins are also valued for their age, mintage, condition, design and country of origin.

Current gold bullion coins on the market today include the:

* American Buffalo
* American Eagle
* Canadian Maple Leaf and
* Austrian Philharmonic

American Buffalo

The U.S. Mint first introduced the American Buffalo gold bullion coin to the investment market back in 2006. These collectible coins, based on the original 1913 Type I Buffalo nickel, marked the beginning of .9999 fine gold bullion coins as issued by our nation’s government.

The front side of the coin depicts a Native American from his profile, while the back features an American Buffalo shown grazing. The gold bullion coins weigh one troy ounce and mintage by year is as follows:

* 2006 – 300,000+
* 2007 – 200,000
* 2008 – Limit based on demand

American Eagle

The United States Mint first introduced the American Eagle gold bullion coins in 1986. These magnificent gold coins symbolize the liberty and freedom we have shared as a country for over two centuries.

Each American Eagle gold coin exhibits the time-honored patriotic symbols of Lady Liberty holding her freedom torch and an olive branch denoting peace. While the coins reverse side presents a male bald eagle carrying an olive branch to his female companion and her nest of babies.

All American Eagle gold bullion coins are backed by the United States Mint and come in the following sizes and values:

1. One-Ounce in $50.00 USD
2. Half-Ounce in $25.00 USD
3. Quarter-Ounce in $10.00 USD
4. Tenth-Ounce in $5.00 USD

Unlike the American Buffalo, the American Eagle gold bullion coins are 22KT (or .9167 fine) gold with a silver and copper alloy to help improve their endurance under typical handling. Every coin is guaranteed by the United States Mint to contain this precise measurement in gold.

Canadian Maple Leaf

The Canadian Maple Leaf gold bullion coins are world-recognized and esteemed for their purity and ornate design. Struck by the Royal Canadian Mint, the Maple Leaf has been in production for more consecutive years than any other gold bullion coin to date.

The Royal Canadian Mint is highly regarded for its flawless measures, and the Maple Leaf gold bullion coin is certainly no exception to their quality upheld. The Mint’s requirements for impeccable planchets, from which the coins are struck, has spawned high interest and demand among investors and collectors alike.

The front side of the coin depicts Great Britain’s beloved Queen Elizabeth II, while the backside features the Canadian national symbol of the maple leaf from which the coin derives its name.

The Canadian Maple Leaf gold bullion coin is produced in four sizes and denominations including:

1. One-Ounce in $50 Canadian
2. Half-Ounce in $20 Canadian
3. Quarter-Ounce in $10 Canadian and
4. Tenth-Ounce in $5 Canadian

Vienna Philharmonics

The Vienna Philharmonics gold bullion coin is internationally-recognized for its magnificence and solid gold content. Produced by the Austrian Mint in Vienna, Austria, the Philharmonic gold coin is minted by one of the oldest and most prestigious minting manufacturers in existence.

In 1989, the Philharmonic gold coin was first struck and denominated in Australian Shillings. That is, until 2002, when the coins were changed over to Euros, making it one of the few gold coins to have been minted and circulated in alternate currencies.

On the front side of the coin, one denotes the “Great Organ,” as from the Vienna Philharmonic performance hall. While, the backside exhibits a plethora of instruments and the ochrestra’s name inscribed in German.

The Vienna Philharmonics gold bullion coin is struck in four incremental sizes and values including:

1. One-Ounce in 100 Euros
2. Half-Ounce in 50 Euros
3. Quarter-Ounce in 25 Euros and
4. Tenth-Ounce in 10 Euros

In troubling times with weak economies, buying gold bullion is an optimal method for preserving your wealth and purchasing power. Gold bullion can be easily bought and sold around the World, so it is a highly liquid asset. This can provide an investor with the flexibility to trade gold bullion for various currencies in times of need.

As with any traded commodity, demand is the driving factor for increasing prices. Over the last four years, gold bullion has risen by more than 300%! Imagine if you had only purchased a few ounces back in 2004. However, gold has made a continuing rise due to a ever-weakening World economy. Thus, its upward trend may only persist in the years to come.

It is true that we currently live in times of uncertainty. Thus, wise investors are buying gold bullion to hedge against unforeseen disasters. Though no one investment is safe without diversity, adding gold bullion to your portfolio can help stave off bankruptcy.

Gold fell for a second day in Asia, dropping below $900 an ounce as a rally in the dollar curbed investors’ demand for the metal as an alternative investment.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were at 1,104.45 metric tons for a third day yesterday. The Dollar Index, which tracks the greenback against six major trading partners, rose for a second day, after gaining as much as 1.3 percent yesterday, the most in a month.

Bullion for immediate delivery lost as much as 1.6 percent to $891.95 an ounce, and was at $898.47 at 1:41 p.m. in Singapore, extending yesterday’s 0.7 percent decline.

A retreat in crude oil also reduced gold’s appeal as a hedge against accelerating consumer prices. Crude fell for a second day on concern the swine-flu outbreak will curtail travel and stockpiles will climb as the U.S. economy contracts.

“The potential drop in air travel as nations around the world declared travel advisories against going to Mexico and even North America could reduce the demand for jet fuel, which in turn weighed on oil prices,” said Steel. “The drop in oil prices further undermined gold prices.”

The World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the swine flu is not containable. More than 150 people have died from flu in Mexico, where the first cases of the disease were discovered.

The amount of metal ETF Securities holds to back its London platinum and palladium exchange-traded commodities rose by 2.4 percent and 4.4 percent respectively in the week to last Friday, the company said.

ETF Securities’ platinum-backed ETC (PHPT.L) holdings rose just more than 8,000 ounces to 347,596 ounces last week, it said, while those of its palladium-backed product (PHPD.L) increased around 11,000 ounces to 261,973 ounces.

Exchange-traded funds, which issue securities backed by physical stocks of a particular metal, have represented a major source of demand for precious metals in recent years.

Holdings of ETF Securities’ largest gold-backed product, Gold Bullion Securities (GBSx.L) edged down by 14,595 ounces or 0.3 percent. However, its Physical Gold ETC (PHAU.L) picked up an additional 29,377 ounces or 1.1 percent.

Overall, the holdings of its three gold-backed products, which also include a small Australian fund, inched up 0.2 percent or 18,413 ounces to 7.395 million ounces.

Holdings of the company’s silver-backed ETC (PHAG.L) were up 400,000 ounces or 2.3 percent week-on-week to 17.539 million ounces, it said.

China has quietly almost doubled its gold reserves to become the world’s fifth-biggest holder of the precious metal, it emerged yesterday, in a move that signals the revival of bullion after years of fading importance.

Gold rose to a three-week high of more than $910 an ounce after Hu Xiaolian, head of the secretive State Administration of Foreign Exchange, which manages the country’s $1,954bn in foreign exchange reserves, revealed China had 1,054 tonnes of gold, up from 600 tonnes in 2003.

The news could spark interest in gold among other central banks. “When the largest holder of foreign exchange reserves discloses an increase in gold holdings, other countries may decide to think more carefully about underweight gold positions,” said John Reade, a precious metals strategist at UBS.

The increase in China’s gold reserves has come primarily from domestic production and refining. However, the news raises questions about the future of Beijing’s foreign reserves policy.

Ahead of the G20 summit in London this month, China suggested global reliance on the US dollar as a reserve currency should be reduced.

China has been diversifying away from the dollar since 2005, when it broke the renminbi’s peg to the US currency and officially marked it to a basket of currencies, but it still holds more than two-thirds in US dollar-denominated assets by most estimates.

As its trade surplus and forex reserves ballooned in recent years, Beijing continued to buy huge amounts of US Treasury bonds while raising the proportion of purchases it allotted to other currencies and to gold.

China’s accumulation of gold has taken place as European central banks have gradually cut back back gold sales following a 1999 agreement to prevent the market from being flooded after prices were dragged sharply lower after the UK decided to sell part of its reserves.

“China’s announcement signals a broader shift in central banks’ attitude towards gold,” said Philip Klapwijk, chairman of GFMS, the precious metal consultancy.

Paul Atherley, Beijing-based managing director of Leyshon Resources, said that even after the latest purchases China had a very small percentage of its reserves in gold, far below the US or other developed countries.