Gold trades higher on uncertainty, volatility

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The smart money is being taken into gold, pushing investors to change their financial behaviour and gold is not just a cheap commodity, it is more than a risk tail investment.
The gold market has outperformed any other market globally, rising by 13 percent since the turn of the year.
The Chinese reserves constitute 2 percent in gold and looking at it, they (Chinese) have taken a more strategic approach against the huge volatility swings in other markets.
If you are an investor in Zimbabwe and holding gold units with Tetrad Investment Bank, that’s a wise decision.
The bullion is truly an inflationary hedge and deserves a place in any investor’s portfolio.
Hedge funds, central banks and sovereign wealth funds are all hunting for value and gold gives you that.
Demand is totally compatible with current financial and political global turmoil as gold still remains the story on the markets.
Gold reached record levels of US$1 921,15 an ounce on September 6, 2011. Prices have more than doubled since the end of 2007 as stock markets slumped, economies contracted and central banks and governments pumped more than US$2 trillion into the global financial system.
At such prices for gold, Tetrad Investment Bank would encourage people to keep their yellow metal in safety-deposit boxes at banks or vaults, which gives them that sense of security.
In these times of market uncertainty, gold is the safest investment option because it protects people from financial downturns especially in this volatility in equities and currency devaluations.
Gold continues to firm at US$1 769,90 an ounce facing resistance at such levels as selling orders remain clustered at these levels.
Gold is simply a mirror of economic and political failure, of all the uncertainties that make people worry.
Turning to currencies, the euro fell as investors believe that the strength of a rally is being re-tested and looks set to be reversed as the G20 ministers are questioning the strength of EU funding.
The euro was trading at 107,82 against the yen and fell to US$1,3404 against the dollar from US$1,3465.
In London, the pound gained because of it being a semi-haven to the dollar. The pound gained to trade at US$1,5823 to the dollar and the pound weakened against the euro to trade at 84,58 pence per euro.
In Japan, the yen fell against the dollar to trade at 80,49 and fell again to trade at 107,82 to the euro from 109,84.
In the South Pacific, the Australian dollar was firm against the dollar encouraging demand for riskier assets.
The Aussie dollar advanced to US$1,0758 after the German parliament approved another Greek bailout which has given investors a reason to hold onto Aussie assets.
It also advanced against the yen to trade at 86,30. With the current noise coming out of Europe on whether the fate of the euro hangs in the balance coupled with better headlines emerging from Greece, the question is will austerity measures be enough for Greece?
At the moment, the market focus is now on the G20 meeting in Mexico City as the EU funding feud ranges on pushing for a reassessment on whether the EU is really resolving their debt crisis.
Zimbabwean markets
In Zimbabwe, the country’s mining sector has failed to capitalise on escalating commodity prices.
The mining sector can help reduce Zimbabwe’s liquidity woes if Government can improve the business climate through regulatory reforms.
Zimbabwe’s economy is relatively closed, fiscal discipline needs to be tightened in order to improve investor confidence.
Investors have failed to price in the extent of the political risk because of too much uncertainties leading to little or no new capital inflows on the ZSE.
The trades on the stock market are very thin as investors remain cautious across the board.
Poor infrastructure, notably rail and major problems in electricity provisions.
Zimbabwe’s financial system is not well regulated as compared to that of Zambia and is showing signs of slowing down.
Most of the Zimbabwean banks are struggling to recapitalise raising fears of a banking crisis in the country as uncertainty grips the economy.
South African markets
A weakening dollar continues to sharpen investor appetite for risk pushing currencies like the rand to the upside. The rand is a risk-on currency supported by a rally in gold and platinum, and continues to see it strengthen retesting 7,5360 against the dollar in Johannesburg trade and at 7,5250 in New York trade from 7,6470. Crude oil took a breather to settle at US$107,30 per barrel after rallying to trade at US$109,94 per barrel.
Crude oil continues to be supported by the political tension between the West and Iran as this will affect supply.
Crude oil has risen by 9,7 percent since the start of the year but the danger is that could hurt global GDP by 0,25 percent according to market analysts.