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Official Sector Gold Policies – At a Turning Point

I believe we are now at a key turning point in the modern history of gold as an official reserve asset – a turning point that is very propitious for the metal’s price in years to come. Central banks attitudes with respect to gold are becoming increasingly positive.After years of persistent net sales by central banks in the aggregate, the official sector may soon become a net purchaser of gold from the market. ...

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KEY GOLD-PRICE DRIVERS

As clients know, we remain “extremely optimistic” on the gold-price outlook -- but, unlike many other bullish analysts, we believe the metal’s ascent will take several years to reach its next long-term cyclical peak. In the meantime, expect high volatility and a difficult climb, fraught with sharp reversals along the way that will, at times, cause some observers to wonder if the market has already topped out. Ultimately, gold will most likely climb into the US$2000 to $3000 range – but it could go even higher given the right confluence of economic and political developments . . . or if a ...

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IPMI Speech

Gold Situation and Outlook Presentation to the International Precious Metals Institute I've been asked to talk about one of my favorite subjects: Gold . . . or, more precisely, the global market for the metal and the factors likely to influence its future price.  In fact, gold is a subject on which I could talk for hours . . . but I've been asked to keep my presentation somewhat shorter - so I'll try to give you some highlights and conclusions. My comments today will be posted on my website - NicholsOnGold.com - so, if you're interested you can easily check back to review my analysis and ...

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GOLD — A NEW MONETARY ROLE?

China and Russia are agitating for a demotion of the dollar in the world monetary system with a new “super-sovereign” basket of currencies, possibly even including gold as the Russian’s have suggested, gaining stature as the new lynchpin. Though such talk may hearten the advocates of gold, the possibility of any sudden change in the world monetary system seems remote, if only because no alternative can provide the, necessarily very large and very liquid capital markets necessary to accommodate reinvestment of reserve assets now held in U.S. dollars. And, for all their talk, the Chinese, ...

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A Conversation with Gold Historian Tim Green

Good friend and renown gold historian Tim Green has been researching and writing about gold for more than 40 years.  His latest book, The Ages of Gold, is the most comprehensive ever written on the history of mines, markets and the price over 6,000 years.  For those of us interested in gold today, there's much wisdom to be learned from the long view -- as you'll discover from my recent conversation with Tim. Jeff Nichols:  What struck you most in researching the 6,000 year history of gold? Tim Green:  The stability of its price over long periods, often centuries, which built up its ...

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The World Economic Crisis and the Outlook for Gold

The World Economic Crisis and the Outlook for Gold Speech to the 3rd Annual China Gold & Precious Metals Summit Shanghai, China Thank you Mr. Chairman for that flattering introduction and thank you to the conference organizers who have made it possible for us to exchange information and insights into the future of gold here in China and in the global marketplace. You should know that my presentation today will be posted on my website, NicholsOnGold.com, so you can easily check back in a few days, or a month, or a year – to review my analysis and my expectations for gold. A few ...

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More on Gold Lending

Our last Gold Brief (Gold Plunges – What’s Going On, October 16) generated much interest and questions about the mechanics of gold lending.  In that piece, we suggested the recent breakdown in the price of gold was much more a reflection of stepped up central bank lending of gold -- and much less a result of actual central bank gold sales or liquidation of long futures positions by hedge funds and other large-scale speculators, both of which seem to have grabbed all of the credit among gold analysts and the financial press. Central banks, eager to earn a small return on their official ...

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Gold Plunges — What’s Going On

Why was gold down so sharply today -- in the face reportedly record demand from investors for bullion coins and small bars? News that European central banks sold 7.6 tons of gold in the week ending October 10th has certainly been a heavy burden on the price and helps explain why the metal could not move higher last week and, if selling has continued, in the past few days. But, it has been central bank gold loans -- even more so than official gold sales -- that has really pulled the rug out from under gold. Gold loans by central banks are an alternative -- and invisible -- means of ...

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Gold — After the Fall

Gold has fallen more than $250 from its record high this past March to its recent low last week.  Most analysts are saying that gold has been pulled down by the drop in oil, the bounce in the U.S. dollar, and an easing of inflation expectations. But, in my view, gold’s swift decent in the past few weeks is a direct consequence of the unfolding global credit crisis.  In short, gold has been an innocent bystander to the financial hurricane hitting Wall Street and global markets. The yellow metal’s own positive fundamentals – and even its role as a safe haven in turbulent financial seas – ...

Jeff Nichols Talks About Gold

Gold’s recent strength has been fueled principally by a surge in investment buying.  Meanwhile, positive market fundamentals – having to do with trends in mine production, secondary supply, and fabrication demand – have played a supporting role in gold’s recent strong performance. As important as it is to take a periodic statistical snapshot of gold supply and demand, price developments in the short-to-medium term have less to do with these fundamentals and more to do with market sentiment, monetary policy and inflation trends, geopolitical events, and the resultant changes in investment ...