THE BEST PLACEMENT IN 2010 Gold is three steps away from breaking the 150 lei/kg threshold

In the beginning of this week, gold broke a new historic high, according to the quotation of the Romanian National Bank, of 147 lei for one gram, about 45% higher than the price it had in the beginning of the year. Thus, for the second year in a row, gold proved one of the strongest and safest investments available.

Gold has risen at a dizzying pace over the last years (35% a year on average), which other investments have failed to match.

For instance, in the beginning of the year, the best interest rate on bank deposits was 11%, but this rate was only available on three or six month deposits. However, given the rise of the inflation, which is expected to amount to approximately 8% in 2010, the returns on bank deposits are actually negative. Romanian International Bank (RIB), RBS, ING and Millenium Bank had the best offers on the market this year.

When it comes to the stock market, shares of port operators "Socep" Constanţa (SOCP) were the only ones to double investors" money, with yields of up to 20%, whereas the FICs (SIF), which are some of the most heavily traded stocks of the ex change actually lost 20%.

Thus, faced with the turmoil of the financial markets, investors flocked to gold, which has been consistently making new highs over the past few days.

Price of gold has also been rising at pawnshops, going above 70 lei, for one gram of 14k gold, and 90 lei for 1 gram of 18k gold.

Of the domestic banks, Piraeus Bank is the only one that still sells gold to individuals, both as minted coins and as bullion, with the latter weighing from 5 to 500 grams.

At this week"s quotations, Piraeus was selling the gram of gold for 172 lei. Thus, a 22k sovereign coin, sells for 1,321 lei, and the 50 g bullion bar sold for 8,600 lei. The bank also allows trading of gold without physical ownership of the metal.

The increase in the frequency of numismatic issues by the Romanian National Bank is further proof of the increase in the investors" interest in gold. All the commemorative gold coin issues minted by the NBR sold out in less than a week, as their resale value increases rapidly, due to their relatively short runs.

The mutual funds market did not escape the gold fever either. The IPO of the closed investment fund iFond Gold, managed by brokerage firm "Intercapital Invest", which allows investors to invest in Romania"s gold projects successfully raised over 2 million lei, and was fully subscribed even before the end of the subscription period.