Physical bullion is better Investment than ETFs

The thrill of investing in precious metals is a great temptation. we need to keep our savings well protected . Today everybody including the increasing number of middle class in Asia , China and India in particular are boosting the demand for physical gold and silver bullion ingots.The gold rush, which in recent days has brought the metal several times to update the historical record does not seem to have discouraged sales to India, where jewelry, ingots and coins are among the most popular traditional gifts to celebrate Diwali. The Hindu festival of lights, was celebrated recently, a thermometer of the gold market , because it represents the peak of the gold sales in a country that is the first consumer in the world of Gold. And the signs so far are very positive, not only by retailers of jewelry, but also by banks, which reported a boom in purchases of gold also in the form decidedly less traditional ETFs.
The overall investment in gold in the second quarter of 2010 increased by 118% to share $ 40 billion, of which about half is represented by ETFs (investment funds linked to the performance of the listing). But it is not only the question of "paper gold" to grow. In recent months, reflecting the uncertainty that still prevails in the markets, there is a growing demand for physical gold for investment. Bullion and gold coins of various sizes to keep in a safe haven for investment is the maximum protection from the so-called "counterparty risk" (as the possible bankruptcy of the company that sells ETF). The local representative in India of the World Gold Council, Ajay Mitra, a few days ago said he was convinced that the week of the festival, between October 31 and November 6, gold purchases in India could have increased to 40% compared to 56 tonnes a year ago and that the favorable monsoon, which brought greater prosperity in the country, argues in favor of high consumption in December, wedding season. Signals that the second Mitra strengthen the hypothesis that India could beat all records of import of gold in 2010: about 800 tonnes, against 539 in 2009 and the record high of 770 set in 2007.

Gold is at an historic high not only in dollars, with prices recently went up to almost $ 1,420 per ounce, but also in rupees (though not in euro: in the European currency the prices are now about 5% below the record June). Despite everything, the attitude of Indian farmers is similar to that of many large investors: the high prices do not scare them, because there is widespread belief that the gold in the coming months will continue to increase in value.
The second floor of quantitative easing by the Federal Reserve, which by June 2011 will enter other markets $ 600 billion of liquidity has been the trigger for the rally in gold and other precious metals: first to correct the wake of a recovery U.S. dollar yesterday, silver and palladium have again updated the maximum (respectively 30 and 9 years), while platinum reached a record two years.
After the Fed's move, it is likely that the major currencies especially the U.S. dollar in relation to the currencies lose value alternatives such as gold. The traditional disadvantage of gold, the failure to generate an income, is strongly reduced in a world with zero interest rates. Its greatest strength, the limited, but is enhanced in a time when central banks expand the supply of paper money. "