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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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INFLATION EXPECTATIONS AND THE PRICE OF GOLD

From a long-term perspective, gold is a bargain at recent prices in the $900 to $930 an ounce . . . and will remain so even as it begins to move into a higher trading range. Recent gold-market developments and technical price action -- along with broader economic and financial-market developments -- suggest gold is bracing for a resumption of its long march upward and a retest of its historic high in the months ahead. First and foremost, the bullish outlook for gold rests on the increasing likelihood of accelerating U.S. inflation in the years to come -- and an associated unprecedented ...

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FED EASING AND GOLD PROSPECTS

This week's news from the U.S. Federal Reserve promising massive quantitative easing in the months ahead greatly increases our confidence in the long-term bullish outlook for gold and silver.  Since the first recorded use of currency by King Croesus some 2,500 years ago, there has NEVER been a rapid increase in the supply of money that has not, within a few years, been followed by an acceleration of inflation.  Why should the current experience be any different!! Our forecast that gold will reach a cyclical high over $2500 and silver will exceed $50 an ounce in the next few years looks ...

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GOLD: STILL VULNERABLE

Gold's tumble in recent days, now about 9.5 percent from its late-February high just briefly over $1000 an ounce, is no surprise to readers of NicholsOnGold.com.  Although we remain bullish for the long-term and foresee more than a doubling of the gold price in the next few years, the immediate picture is less rosy . . . and the yellow metal remains vulnerable to further short-term selling. A number of factors have contributed to gold's decline in the past week and may remain influential in the weeks ahead: •    First and foremost, the market has had to absorb an absolutely fantastic ...

NO SURPRISES

Gold's retreat in recent days from its brief flirtation last week over $1000 an ounce was no surprise.  We warned in recent posts that the surge in secondary supply, particularly from Asian and Mideastern markets, and the worldwide collapse of fabrication demand left the price vulnerable -- and an easing of investor interest could bring a sizable correction in the yellow metal's price. Moreover, when everyone seems to be jumping on the gold train, nary a bear is to be seen, bulls are uniformly revising upward their price forecasts, and the financial press suddenly gets all hot and bothered, ...

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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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Jeff Nichols Interview on South Africa’s MoneyWeb Radio

Here's the text of my November 19th interview with Geoff Candy of South Africa's MoneyWeb Radio.  For a podcast of the interview click here.  The bottom line quote: "It wouldn't surprise me if in our lifetimes we never see gold back below $700/oz." GEOFF CANDY: Jeff Nichols joins us now. He is the MD of he American Precious Metals Advisors. Jeff, I was reading one of your blogs, NicholsOnGold.com, about where gold might go, and whether we're at an interesting turning point in gold. But there was also a report out by the World Gold Council, saying that third-quarter demand for gold is the ...

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GOLD: Seeing Past the Sell-Off

Gold has fallen more than $300 – about 30% – from its all-time high of US$1034 last March to its recent lows near $720.  And, since the beginning of the year, it is off about 12% – not too bad compared to most other asset classes.  Looking at the decline of the past week, most analysts are saying that gold has been pulled down by the drop in oil, the strong U.S. dollar, and an easing of inflation expectations. But, in my view, gold’s latest swift decent is a direct consequence of the unfolding global economic situation, the playing out of the credit crisis, and the onset of recession.  The ...

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