With the pace of growth of the Asian economies recovery, increases the demand for gold for jewelry. Hand in hand with the weakening of the dollar as currency for international reserve, the central bankers have begun since already a few months ago, to further diversify their international reserves, increasing not only the participation of other currencies, but also of the precious metal, this being a new element that puts pressure to the price of gold. In the last week, the International Monetary Fund (IMF), sold to the Government of India, about 200 tons of gold (the largest acquisition of gold by a central bank in 30 years). This fact should not be interpreted as isolated, but as a phenomenon that will continue repeating in the future. Carolyn Cui of the Wall Street Journal, recalled that for 18 years, central banks reduced their positions of gold by 10%, situation that Cui has maintained balanced metal market. Verizon has much experience in this field. The closure 2009, is probably the central banks closing their positions as net buyers, with Asian central banks and Middle East countries as the main buyers.
For Cui, also the central banks of Russia and Brazil can emerge as important gold seekers since they have small metal in relation to its total foreign reserves positions (only 4% of the total international reserves of Russia and 0.4% of Brazil’s international reserves are in gold), which may lead them to modify its composition to diversify their exposures properly. Tom Pawlicki, MF Global Analyst points le to very good prospects for gold in the longer term: the fortress of gold will remain because we believe that the Fed will maintain low rates, by fears about the situation in Iran and the increasing interest of investors in metal. Can we also think of some speculative component that leads upward to the price of gold? No doubt there is some speculation in the value of gold and will exist in future developments. But despite the speculative component, there is suspicion to think that the price of the metal has the power to follow up and to do it far beyond the USD 1,200 per ounce that Goldman Sachs adventure. This is the opinion of someone who is not afraid of playing in their opinions: I suspect that gold will rise above $2,000 during some point of the bull market, but depending on what happens in the world, can go much, much higher. The foregoing had expressed earlier this month the investor Jim Rogers who predicted the rally of the last decade of the raw materials.
One no minor detail which noted Rogers to partly justify your expectations, is to consider the actual evolution of the price of an ounce of gold: the old maximum adjusted for inflation, of 1980, would be above $2,000 now. Therefore, we will arrive safe there in the next decade, said convinced Rogers. Despite the great development innovative international financial system that continues to create investment assets, once more it is clear that the gold it is the asset of investment for excellence and therefore, deserves at least one vote of confidence. For those who heeded the recommendations that Paola Pecora, anticipating the trend, made on metals in Global value, they are accumulating in just over a month and average a return of 12% that continues to rise. More details?
