gold - future direction?

  1. 9,081 Posts.
    Here is but one view:

    "GFMS's MD
    Philip Klapwijk said he is bearish short-term because of
    the overhang of speculative long positions which have
    driven up the gold price 'too far, too fast.'

    "But further ahead - before year-end - the uptrend should
    resume.

    "[Klapwijk] bases his optimism primarily on the growth of
    investment demand, forecast to increase 23 percent this
    year to 468 tons, which is underpinned by these factors:

    * The 'powerful political backdrop' - tensions in the
    Mideast, terrorism, potential crises over North Korea/Iran
    going nuclear.

    * Economic uncertainties such as fiscal deficits, inflation
    fears, interest rates and currencies. 'The dollar will
    probably drop, maybe sharply,' and there is a fairly strong
    inverse correlation between gold and the greenback (they
    trend in opposite directions).

    * Non-performance of, or fears about, major investment
    asset classes such as shares, bonds and property.

    "You couldn't ask for a better mixture for investment
    demand and higher gold prices - and the positive dynamics
    are likely to remain in place next year," Klapwijk says.

    "Although much of the strength of the gold price in recent
    months has come from speculative buying, there are some
    signs of improvement in the quality of investment demand.
    Over the past two years HNWIs (high net worth individuals)
    have begun to buy. And private banks have started to
    recommend a gold content in portfolios to lower their
    overall risk."

    *** And this from a dear reader: "USS Dollar Standard,
    riding low in the water and laden with trillions of dollars
    of interest-bearing debt, plunges ahead towards monetary
    maelstrom. "
 
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