You are reading "Universal Coin’s President Cites 15 Reasons Why Gold Should Reach $1500 in 15 Months" posted by "James Reilly"
Beaumont, TX (PRWEB) October 1, 2009
Mike Fuljenz, President of Common Coin & Bullion in Beaumont, Texas factors out that in September, 2009, Standard & Poor’s (S&P) International Funding Coverage Committee envisioned that gold prices “might rise to the $1,200 to $1,500 ounce vary over the subsequent 9-One Year.” Can it happen? Will we see gold at $1,500 by means of year-finish 2010 – about 15 months from this writing? Making An Allowance For that gold used to be simplest $250 in early 2001, a rise to $1500 would cap a 500% gain in the first decade of the 21st century.
Mr. Fuljenz says, “Sure, it might happen. Listed Here Are 15 Universal reasons why gold bullion might Reach $1,500 inside 15 months:
#1: Gold Will Have To “seize up” to other commodities. For the primary nine months of 2009, silver is up 50% and platinum has risen Forty Two%, compared with simply 15% for gold. Oil prices are up One Hundred% seeing that February. Up To Now, gold has if truth be told lagged the commodity group, so gold Should play “seize-up” quickly. This Is supported via a Banc of The United States Securities (previously Merrill Lynch) report, “Gold Is Breaking Out.”
#2: A falling buck usually pushes gold costs up: Gold is universally quoted in dollar phrases, so when the dollar falls, gold regularly rises. There tends to be a replicate image (terrible correlation) between gold and the dollar. For Instance, the buck is down 15% in 2009, whereas gold is up 15% in 2009. In a recent ny Instances opinion piece, the legendary investor Warren Buffett wrote that “Unchecked buck emissions will indubitably cause the buying power of our united states to melt.” As Well As, he referred to that the dollar’s destiny is extra in the palms of Congress than the Fed, because of The Us’s ballooning funds deficits.
#3: Inflation is now beginning to rise – and gold is a basic inflation hedge. Last fall (2008), the Fed doubled the U.S. Cash supply inside three months – which is unprecedented in U.S. History. As Milton Friedman mentioned, “Inflation is all the time and far and wide a financial phenomenon.” This new Money will gasoline inflation over time, despite the fact that we’ve To This Point only viewed inflation in commodity prices and other property.
#Four: China is buying gold for its Primary-bank reserves, whereas lowering its proportion of dollar purchases. Beijing is also encouraging non-public gold possession: Government-run Chinese TELEVISION inspired 1.Three billion new Chinese Language “gold bugs” invest in gold, which they can now do at local banks, fueling home demand. Beijing recently printed that it had virtually doubled its Critical-financial institution bullion holdings in the Last five years.
#5: Relevant banks are now internet patrons of gold for the first time considering that 1998, when the present application of Valuable financial institution gold gross sales started out. This ends the specter of Imperative banks hanging a ceiling on gold’s worth rise, which the mainstream gold bears erroneously predicted in 1999, when gold was buying and selling smartly beneath $300.
#6: New Gold ETFs (Change Traded Money) will promote extra gold buying. ETFs must buy Physical gold to again their shares. This alone boosts gold’s demand quantity. The SPDR Gold Shares Exchange-traded fund (ETF) now holds extra gold than many Major governments, about $35 billion in gold. In Addition To the prevailing ETFs, a brand new gold ETF used to be recently launched, “Bodily Swiss Gold Shares.”
#7: Main insurance coverage companies and hedge fund managers are also buying gold. Northwestern Lifestyles, The Usa’s 1/3 largest insurance agency, recently offered gold for the first time in its 152-12 months History. We Will doubtless proceed to peer Main new gold purchases from surprising sources like this. If Truth Be Told, 20 of twenty-two (Ninety One%) Best hedge fund managers recently surveyed have been buying gold personally for protection from a vulnerable buck and inflation. Individual and IRA demand was once up so much within the Remaining year that for the primary time in 23 years, the U. S. Mint had to universally droop selling a variety of gold bullion cash.
#8: Gold hedging via producers has stopped. Best gold mining companies like Barrick Gold have stopped hedging their future gold manufacturing – a way that tended to keep a lid on gold’s worth rise.
#9: Jewellery demand is the missing hyperlink. Gold has risen strongly (to over $1,000) with none assist from India or the other Global Jewellery markets. Jewelry demand is down 25% in 2009. Once those markets recover, after the worldwide recession ends, this Major demand supply might push gold greater, sooner. In Reality, a USAgold analyst recently noted Indian gold demand is now rising significantly.
10: The national debt is hovering. The White Home not too long ago predicted that Every Other $9 trillion will probably be brought to the deficit over the following 10 years, thereby DOUBLING the nationwide debt by using 2019. This 12 months by myself, the U.S. budget deficit will add a record $1.6 trillion, greater than 3 times Last year’s bloated deficit and 10 Instances the 2007 deficit. Uncle Sam’s whole debt now equals more than Eighty% of the u . s .’s GDP, a level not viewed seeing that World Conflict II. Treasury Secretary Timothy Geitner gave additional gasoline to gold bulls with the aid of announcing that the U. S. would most certainly no longer Reach a “sustainable federal price range deficit” unless 2013.
11: Failed banks are draining FDIC reserves. To This Point in 2009, 94 banks have failed and hundreds more are anticipated to fail in 2010-13. (Over 400 banks are on the “drawback checklist” now). The FDIC reserve fund is down to Zero.22% of insured deposits – neatly below the Congressionally-mandated minimal of 1.15%. The FDIC estimates that bank failures through 2013 will price the FDIC $70 billion – vs. $10 billion available now. Bottom Line, when individuals don’t feel protected preserving cash in banks, they’ll store more wealth in gold.
12: Another Sept. 11 (or similar crisis) may ship gold hovering. The assault on The Usa in 2001 was the start of the present lengthy-time period bull market in gold, as buyers realized the sector had modified. Now We Have now gone over eight years with out a an identical shock, but gold might bounce after any equivalent future experience.
Thirteen: Gold manufacturing growth is flat. The South African mines are old and depleted. New gold finds are usually in unfriendly international locations in remote areas of the globe. It takes years to bring a new find into manufacturing. New gold provides barely fit inhabitants growth, so that any demand growth can push gold higher.
14: Fall is a robust season for gold, and We Have two autumns to return prior to year-finish 2010. The 2 very best months for gold (because 1973, when currencies commenced to “flow”) are September and November, and the six months from August to January average 7.Eighty Two% features in gold vs. just 1.81% for February through July. (That Is principally as a result of the vacation and marriage ceremony season in India and yuletide within the West.)
15: Mainstream publications are turning inventory market traders into gold bugs. Nearly daily, the Wall Boulevard Journal and Monetary Occasions have gold tales, plus Barron’s “Commodities Corner” and Main Cash magazines (Forbes, Fortune, Money, and Good Money), which feature gold on the quilt.
Then, there are the unknowns. As An Example, Must the new well being care bill move Congress and send the federal deficit hovering further. The dollar could then decline so much quicker, sending gold up farther.
Along With, gold at $1,500 is just not in point of fact very excessive. Adjusted for inflation, gold’s former top of $850 in January 1980 would be approximately $2,500 in as of late’s bucks. So $1,500 could be only the start. Gold at $1,500 is handiest an period in-between purpose along higher costs, just to compare the long-time period historic growth from a base of $20.67 per ounce when U.S. coinage was tied to gold, prior to 1933.
Historical Past has proven, a gold market that developments upward in most cases results in a greatly greater new consumer response to coin and bullion dealers advertisements. This steadily, over time, ends up in elevated demand and rising costs for many uncommon gold cash.
Mike Fuljenz and Universal Coin & Bullion had been just lately awarded the 2009 Numismatic Literary Guild Award for having the very best Seller Publication.
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