Peter Schiff put’s gold in perspective amid the current European crisis.
Mar 18
Gold Group’s John March lays out the chances of hyperinflation and that physical gold is a good way to protect against it. He predicts $1,500 – $1,600 gold by year end.
Jan 19
How high can gold go? Most believe this depends on the effect of inflation. However, we are not likely to see this for at least another 2-3 years. There is no denying that the super low interest rates set by the Federal Reserve, European Central Bank and the Bank of England has dramatically increased the money supply. When you consider the extended period for which these low interest rates have been held, inflation seems a certainty. These central banks need to put the brakes on quick.
Also, central banks worldwide are becoming net buyers of gold as opposed to net sellers. This has put upward pressure on the gold price. Look, globally $12 trillion in stimulus has been created. Most of this is yet to be spent. When it is we are likely to see inflation in most areas. The case for $5,000 gold is looked at in detail in this excellent article on commodityonline.com.
It seems that the fundamentals indicate a bright future for gold.
Jan 13
The Chinese government has increased the amount of deposits banks must hold on money lent out. This is expected to reduce the amount on money flowing into commodities, and therefore, some predict that the Gold price will fall back.
This may create an opportunity to buy in the dip. However, the purchasing power of China’s currency will improve in the long term as a result of this rule on the fractional reserve system Chinese banks implement. If your currency is the Dollar, Euro or GB Pound this new regulation won’t have a significant impact commodity prices in the long term.
Here is a Bloomberg article that highlights this issue.
Jan 12
Here is a presentation on why you should strongly think about buying gold in order to protect the purchasing power of your savings.
Jan 12
The IMF predicts that growth in China and India along with other developing countries will be about 7.3 percent this year. This shows an economic re-balancing between the west and the east. Most of the global growth will occur in Asian countries over the next 10 years. Deutche Bank’s Chief Economist for China Ma Jun stated that in the next 10 years the GDP of China could overtake that of the United States.
This increased wealth in the East, and the need for major infrastructural projects in that region, indicate an increased demand for commodities. According to Bank of America-Merrill Lynch executive Diego Parrilla commodities as an asset class look promising. Oil, platinum, copper and gold will extend their rally this year as growth in emerging markets including China and investment demand fuel gains.
The relationship between Gold and the Dollar has quite a lot to do with the believe that Gold may rise. This is because of the money that has been injected into the system as part of various stimulus packages throughout the world. This points to inflation as people’s savings have been diluted by all this new money. Central banks in Asia are buying Gold. Previously Central Banks globally were net sellers of Gold. This change in central banking policy emphasis Gold’s strength right now.
