Skip to main content

Gold poised for record run

Gold is poised for a record run. So says The Financial Times in its recent report by Kevin Morrison. The news regarding gold's bright prospects comes from an annual survey issued by metals consultancy group GFMS, which sees a renewed attack on last year's high above the $700 an ounce mark.

Here's an excerpt from FT's article, "Gold poised for record run":

Gold prices could exceed last year’s 26 year high of $730 an ounce within the next 12 months due to a weaker dollar, rising geopolitical tensions and an investment led rally, according to the annual survey by GFMS, the metals consultancy.

GFMS said given the general favourable backdrop and the still low level of participation form institutional and private inventors in most countries, there remains considerable upside potential for gold even as the current rally enters its seventh year.

The GFMS survey highlights the role of investment demand in keeping gold prices high. Jewelry demand for gold is said to be down 30 percent from its peak levels back in 1997, but judging by the entries in a recent jewelry design competition in Asia, gold and gaudy are in. Noone's skimping on the metal in these designs.

Also, we see continued emphasis on the role that a weak dollar is playing in gold's price rise, but scant mention of the fact that gold is rising in terms of all fiat currencies. This has been true for over a year now, and in some cases the trend started even earlier.

Thankfully, FT's report on the GFMS survey makes note of these facts:

Gold also appreciated in other currencies too, with a 34 per cent gain in South African Rand prices, a 21 per cent rise in the yen gold price and a 8.7 per cent advance in the Euro gold price.

The trend is clear. Look at worldwide money supply growth figures and you will see that they are rising across the board. The US dollar is not the only currency base being inflated. Gold is rising against most currencies to reflect these trends. Savvy investors and savers in every nation should be cognizant of this reality.

Popular posts from this blog

Seth Klarman: Margin of Safety (pdf)

Welcome, readers! Signup for free email updates at the Finance Trends Newsletter . Update: PDF links removed due to DMCA notice. Please see our extensive Klarman book notes below. New visitors, please check the Finance Trends home page for all new posts. Here's something for anyone who has been trying to get a look at Seth Klarman's now famous, and out of print, 1991 investment book, Margin of Safety .  My knowledge of value investing is pretty much limited to what I've read in Ben Graham's The Intelligent Investor (the book which originally popularized the investment concept of a "Margin of Safety"), so check out the wisdom from Seth Klarman and other investing greats in our related posts below. You can also go straight to Ronald Redfield's Margin of Safety book notes .    Related posts: 1. Seth Klarman interviews and Margin of Safety notes     2. Seth Klarman: Lessons from 2008 3. Investing Lessons from Sir John Templeton 4.

Slate profiles Victor Niederhoffer

Slate's recent profile of writer/speculator, Vic Niederhoffer has been getting some attention from traders and finance types in recent days. I thought we'd take a look at it here too, to offer up some possible educational value from Vic's experiences with trading and loss. Here's an excerpt from Slate's profile of Victor Niederhoffer : " I've enjoyed getting your e-mails. It sounds like you've thought a lot about being wrong. Well, the reason you contacted me, to call a spade a spade, is that I'm sort of infamous for having made a big, notorious, terrible error not once but twice in my market career. Let's talk about those errors. The first was your investment in the Thai baht, which pretty much wiped you out when the Thai stock market crashed in 1997. I made so many errors there it's pathetic. I made one of my favorite errors: "The mouse with one hole is quickly cornered." That is key. There are certain decisions you make in li

William O'Neil Interview: How to Buy Winning Stocks

Investor's B usiness Daily founder and veteran stock trader, William O'Neil share d his trading methods and insights on buying winning stocks in an in-depth IBD radio interview. Here are some highlights from William O'Neil's interview with IBD: William O'Neil's interest in the stock market began when he started working as a young adult.  "I say many times that I didn't get that much out of college. I didn't have much interest in the stock market until I graduated from college. When I got married, I had to look out into the future and get more serious. The investment world had some appeal and that's when I started studying it. I became a stock broker after I got out of the Air Force."    He moved to Los Angeles and started work in a stock broker's office with twenty other guys. When their phone leads from ads didn't pan out, O'Neil would take the leads and drive down to visit the prospective customers in person.