Gold bounced strongly from a weak December performance, with renewed buying from India helping a more positive investment outlook generally to push gold to a close of nearly $1750 at the end of the month and an increase of 10.77% on the month.
Investment markets shrugged off cuts in forecasts for global growth by the IMF, continued European debt issues, and mixed signals from the United States.
The New Year began on a firm footing, as gold put December behind it and seemed to concentrate on looking forward with renewed vigour. Better than expected US manufacturing data at the start of the month put investors in a bullish mood.
Though European debt problems persist, a firming of German attitude against further bail-out money for Greece was seen as necessary medicine. It is hoped that Greece’s private creditors will accept a 50% reduction in the amount of money owed to them and a lengthening of the repayment period.
The IMF cut its forecasts for global growth through 2012 from 4% to 3.3% citing European debt problems and its weakening economies. It sees further austerity measures in Europe as a foregone conclusion, and expects a mild recession across the continent that will impact further afield.
In a further move, the IMF has said that it believes sanctions placed upon Iran by Europe, including banning oil and petroleum products and freezing its central bank assets, will cause upward pressure to the oil price that could see it rise by more than 20% over the medium term. Again markets shrug off this forecast.
Staying in Europe, Britain released borrowing numbers that showed its net debt has risen above £1 trillion for the first time, and also said that its economy had contracted in the last quarter of 2011. European woes are not limited to the Eurozone countries.
Precious metals have fared well this month, with gold rising for four weeks straight.
Looking for a precious metals provider that sells gold coins and bullion (including junk silver)? Click here to visit our favorite provider (FREE SHIPPING!).