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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. In fact, if we include sovereign wealth funds – which are non-central bank government-owned investment institutions – the official sector may already be a net buyer of gold. On ...

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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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RISK/REWARD RATIO FAVORS LONG SIDE

Although gold remains vulnerable in the short term, the risk/reward ratio increasingly favors the long side -- and we are advocating more aggressive investment purchases should gold again dip below $900 an ounce. Even if the metal first weakens, the overall picture is looking a little brighter and, before long, we could see the gold move to a somewhat higher trading range. Importantly, the selling of old jewelry and other gold-bearing items in many global markets abated when prices recently dropped briefly below $900.  And, more recently, even with prices trading in the $920 to $940 ...

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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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