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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 — Nearing a Turning Point

Despite gold's latest weakness and the possibility of further breakdown, I believe we are nearing a turning point in the tenor and direction of the market.  Before long, gold will begin a new and sustainable upward march. Until then, with the yellow metal in the $700 to $730 range - and certainly at lower price levels - price-sensitive demand from key Asian and Middle Eastern markets should stabilize the market. With $1000 gold very likely in the next year - and still higher prices beyond - the risk/reward ratio is very much skewed to the plus side. Commodity Disinvestment Running Its ...

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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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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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Fresh Thinking About Gold

Here's a summary of what we've been saying in the past week about gold and the world macroeconomic picture: The idea that the U.S. dollar is suddenly stronger in recent weeks is a foolish notion.  Rather, gold is telling us that currencies, across the board, are weaker -- only the dollar a little less so than the euro, the UK pound, and other key currencies around the world.  In fact, as finance ministers and monetary authorities in the euro-zone continue to fiddle, longer-term economic and political cohesion becomes increasingly questionable.  In my view, the euro is just beginning a long ...

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Gold on the Rollercoaster — Volatility to Continue

To be honest, no one really knows if the rescue package just approved by Congress will restore order to world financial markets – but whatever the impact, I feel confident about the future of gold. For now – and the near future – gold is caught up in a mass liquidation of virtually all assets. Expect “high-stakes” volatility in gold to continue as world financial markets size up the U.S. rescue package . . . and realize that America’s politicians have thrown them a lifeline tied to a leaky boat. Retail gold investors – real people like you and me – have a different view of the world ...

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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 – ...

Gold Near $800

Gold near US$800 remains vulnerable in the near term to a stronger dollar but is underpinned by rising physical demand in key global markets, deteriorating macroeconomic and financial environments, accelerating inflation, and tight supply/demand fundamentals. A pop in the U.S. dollar, prompted by signs of deteriorating economic activity in Europe, has once again undercut gold, just as the metal looked like it might hold and build support around $830 an ounce. Having failed to establish a foothold over $830 an ounce, gold is greatly oversold but still looks technically vulnerable.  A ...

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Gold — After the Fall

Despite this morning’s sharp sell-off in precious metals, the key factors favoring gold, silver, and the platinum-group metals remain in place. Gold, in particular, has been acting much like a currency, reacting negatively to strength in the U.S. dollar in recent weeks, just as the depreciating greenback early this year was mirrored in gold’s swift run-up into four-digit territory.  And, the short-term outlook – for the days and weeks ahead – still depends very much on the fate of the U.S. dollar. Both big moves – first up to US$1034 and then back down to the $850 vicinity –reflect, in ...

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