The outlook for the precious metals market remains extremely bullish, primarily as a consequence of the ongoing Eurozone crisis, said an expert.

There are a range of compelling reasons to believe that the future price outlook for precious metals remains positive, said Gerhard Schubert, head of Precious Metals at Emirates NBD, a leading bank in the region.

Addressing the annual general assembly of the Dubai Gold & Jewellery Group (DGJG), he highlighted the weakness of the euro against the dollar and the serious sovereign debt issues across much of Europe, which will further support the precious metals market.

Schubert said that there are now clear signs of fatigue among the electorate in France and Germany, the two largest Eurozone nations, to support the euro “endlessly and at all costs.”

“The new Finnish government was elected on a clear platform of ‘no more bailouts,’ which will make it increasingly difficult for Europe to offer support for distressed nations such as Spain. Against such an uncertain backdrop, the appeal of safe-haven commodities like gold and silver is naturally even greater,” said Schubert.

“At the same time, consider that the Mexican Central Bank purchased some 93 tonnes of gold in February and May of this year, increasing their reserves of the precious metal 13-fold.”

“Those purchases were made at or near all-time high market prices, which is another very bullish sign, especially considering how closely the Mexican economy is linked to that of its neighbour, the US,” he added.

“When it comes to precious metals, all of these international indicators are pointing in the same direction – and that direction is upwards,” concluded Schubert. – TradeArabia News Service