UBS: Run sur l'or

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On le savait ..

UBS has dramatic news this morning too:

"…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.

Since EMU problems will continue to flare, the immediate issue is, is this early 2009? Will extremely unusual Western bullion demand be quenched by unprecedented gold outflows from the normal buying markets, accelerated by FX moves? Eastern premiums will answer this shortly.

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