Gold Is Going Higher
by David Galland: The
Fall of the U.S. Empire and the Breakup of the Geopolitical Matrix
are many reasons that gold and silver are going to keep moving higher
as the fiat currencies trend lower, at our recent Casey Research
Summit in Boca Raton, faculty member Mike Maloney pointed out a
fact that, while obvious in hindsight, I had never heard mentioned
during the last major precious metals bull market in the 1970s,
only about 10% of the world could own gold either due to
legal restrictions or a lack of liquid capital.
countries prohibit gold ownership, and a far higher percentage of
the worlds population has transitioned out of poverty.
the most germane example, having legalized gold and silver ownership
for private citizens in 2004, and through the explosive growth in
national GDP that has caused Chinese gold purchases to skyrocket.
the point, the following is an excerpt from a recent Wall Street
are snapping up gold bars and coins, buying more than ever before
in the first quarter of 2011 and overtaking Indian buyers as the
world's biggest purchasers of the metal.
A growing middle-class
in China is raising the appetite for gold there.
demand for gold more than doubled to 90.9 metric tons in the first
three months of the year, outpacing India's modest rise to 85.6
tons, the World Gold Council said in its quarterly report on Thursday.
China now accounts for 25% of gold investment demand, compared with
underscores the rising appetite for gold among the growing middle-class
in China. Fears of the country's soaring inflation, as well as a
search for new investments, is luring investors to gold, and marketing
of the precious metal has also increased in recent months.
people will be surprised by the strength in the Chinese demand,
but we think this is a trend that is set to continue," said
Eily Ong, an investment research manager at the gold council.
active savers, stashing away on the order of 50% of their income,
the Chinese are increasingly opting for gold over the renminbi to
stash their wealth.
For those wondering
just how big a development this is, consider that in 2007, just
before investing in gold became the thing to do, gold
demand in India was 61% of the worlds total while Chinas
gold demand was only 9%.
In other words,
India is no longer the only elephant in the gold vault. And they
are not alone investors around the world are now able, and
willing, to buy gold as a way of protecting their wealth from the
inevitable decline of the fading fiat currencies.
I still dont
think we are out of the woods on a commodities correction, but there
are so many black swans floating overhead that literally anything
can happen, at any time. Thus buying in tranches on pullbacks over
the next four to six months still makes a lot of sense.
But in the
longer term, gold has almost nowhere to go but up.
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June 1, 2011
is the managing editor of Casey
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