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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG
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To: Wade who wrote (11441)11/13/2009 6:18:28 AM
From: TheSlowLane   of 48092
 
Wade - also consistent with JC's view. The reason why he expects less of a pullback than we might otherwise get is due to what he calls two major long-term, quasi-permanent shifts in the gold market that will lead to higher prices:

1) Individual investors are rebuilding gold as a percentage of their financial assets. We got down to a point where gold represented 0.2% of the world's wealth. That number is up to about 0.6% now and ultimately he expects it to get to 1%-2%.

2) Central banks have shifted from being net sellers of gold over the last 40 years to what he expects will be net buyers of gold for the foreseeable future. CPM expects central banks to be buying 6-10MM ounces per year for the next decade. He conceded that the numbers could turn out to be quite a bit higher than that.
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