Global Investors Turning to Physical Gold…

UBS comments on the very heavy demand from European investors for physical bars and coins (from JB’s dialy gold market commentary, which can be read every evening at

“…our Zurich and Geneva sales desk experienced exceptionally strong demand for small bars and coins. All size bars up to 1kg are wanted by retail investors. Buying has been evident all week, but demand yesterday was the greatest that we have experienced since 2008…Coin demand is so intense that supply is struggling to match, even as premiums rise. Capacity constraints, greatly evident last year, are once again a feature. We saw particularly strong demand for Kruggerands, but all coins are being sought right now….Physical demand has been most obvious in Germany this week. Considering their primary role in the Greek bail out and the near borderless European debt problem, with few viable investment alternatives Germany investors have turned to gold.”

UBS officially raised precious metals to overweight this morning.  In the surprising – perhaps Freudian? – words of Larry Kudlow – the interminable CNBC defender/apologist of fiat currency and the U.S. financial system – “GOLD IS THE NEW RESERVE CURRENCY…”