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« Uranium, Gold and Silver: Traffic Trends | Main | Yamana Sees Meridian Bid Rejected But Finds Support at $11 »
Wednesday
Aug012007

Reasons to Invest in Gold: 01 August 2007



We have jotted down a few of the reasons that we believe will form part of the driving force behind gold for the foreseeable future. You are cordially invited to add your own reasons to our list with the view to covering whatever we may have missed out.

Gold is money. Gold is a true store of wealth and has been used as such for thousands of years when other currencies have come and gone. Gold is now in the ascendancy along with gold producers, mining and exploration companies.

No new large discoveries of gold deposits dampening supply.

It can take up to 10 years to bring a new mine to production

Falling gold production worldwide adding to its scarcity

Gold EFTs take gold off the market thus reducing supply

In the last Bull Run 70s to 80s gold prices increased 20 fold

Metrics: DJIA vs. Gold, about 19ozs buys the Dow Jones, it has been 1:1 in the past and could be again in the future. Assuming the Dow Jones remains above 10,000 then the gold price could hit $10,000

Gold at its previous high of $850 adjusted for inflation puts the gold price at $2000 plus

Geopolitical uncertainty, a nuclear Iran and other issues create world tension which pushes up the price of gold

A Dictatorial South America imposing restrictions such as increased taxation and nationalisation will deter investment and reduce gold production

India is growing and its hunger for gold will drive gold prices higher

The sleeping dragon of China has awoken as 1.3 billion people partake in their own industrial revolution. This newfound affluence will lead to an accelerating consumption of the finer things in life such as gold.

Internet: information travels around the world in a nano-second, reactions to news, true or false, will add to the volatility of the gold price


The US Dollar flirts with psychological level of ‘80’ which we see as major league trouble if the US Dollar falls much below this level.

Web trading: increasing everyday, resulting in the trends being more exaggerated than ever before, so the spikes in gold prices will greater than we can now imagine

The savvy central banks and their governments will buy gold as other central banks continue to sell gold in order to finance the expansion of their public services departments with a proliferation of non-jobs such as Enablers and Facilitators

The mania that I traded in during the last Bull market will be nothing compared to the coming explosion in gold prices and maniacal actions of traders and everyday people in the coming bull market in the precious metals sector. Since 1979 everything has become a lot faster including the execution of your orders to the market. The speed and magnitude of change in the price of gold will be beyond your wildest dreams...

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Reader Comments (2)

it's shiny.

July 16, 2009 | Unregistered CommenterBill

Rats - we missed that one!

July 16, 2009 | Unregistered CommenterGold Prices

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