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Mainstream Investors Start Foray into GoldBy: profit confidentialArticle Word Count: 470 words [Comments (0)] Total Views: 2 Views |
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Last week, investors (mostly hedge funds) increased their gold long-positions for the fourth consecutive week—the last time that happened was eight months ago (source: CFTC data). Add this to the fact that world central banks made their biggest purchases of gold bullion during the third quarter of 2011 in over two decades, with a slew of central bank buyers entering the arena for gold bullion for the first time in years (see: Central Banks Back Buying Gold with a Vengeance) and all of a sudden it sounds like everyone’s chasing gold bullion. Loyal readers know from my writings that I rarely chase the herd when it comes to investing. When the masses are selling, I want to buy; when they are buying, I want to sell. In the case of gold bullion, mainstream investors are only just getting involved in gold bullion. How do I know this? Our parent company, Lombardi Publishing, estimates that gold held for investment purposes is equal to one percent of all global financial assets. In the 1960s, gold held for investment purposes was equal to five percent of global financial assets. To reach that five-percent level today (because of the explosion in financial assets), at current gold bullion prices, it would be physically impossible, as there aren’t enough gold reserves out there. Hence, the only way that gold investment as a percentage of financial assets can increase is by the price of gold bullion rising. If the buying of gold by world central banks continues, which I believe it will, 2011 could end being the biggest year for central bank gold bullion purchases in 40 years. But, next year, the debt problems could slowly start shifting from the eurozone to America and, if that happens, gold bullion prices will run up quicker. We are well into Phase II of the bull market in gold bullion. This is when retail and institutional investors start moving money into gold bullion. Phase III is when the speculators and latecomers arrive on the scene—something we are far from. I’m predicting that 2012 will be a spectacular year for the stocks of quality gold mining companies. Michael’s Personal Notes: Now this is what you call perfect timing… Last Wednesday, on November 30, 2011, six world central banks cut the interest rate at which banks can borrow U.S. dollars. The cost for For more details visit us:-Stock prices Author Info100% FREE Sign Up for a copy of our exclusive report: Grab this articles
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