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GOLD
POISED FOR RECORD RUN
by David Shvartsman
Finance Trends Matter
April 4, 2007
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.
©
2007 David Shvartsman
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David
Shvartsman
Finance Trends Matter
Chicago, IL USA
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