SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: TobagoJack who wrote (59835)4/28/2006 8:44:29 PM
From: ild  Read Replies (1) of 110194
 
From JPM research:

Although the magnitude of the gold price rally may translate into some shortterm
profit taking, we believe the medium-term outlook remains positive. We
highlight the following reasons supporting our positive stance on the sector:
1. Falling supply—mine supply peaked in 2001 and continues to decline.
Limited exploration spending and Central bank purchases to exacerbate.
2. Strong fabrication demand from India—continued economic growth and
a more liberalized gold environment to support ongoing demand. No early
signs this is slowing. China also provides demand upside following
deregulation of its gold market.
3. Inflation risks rising—Gold’s position as a traditional inflation hedge has
been gaining traction in recent months. Continued high oil prices are
unlikely to see this argument erode. At the least, inflation fears should
provide some downside support in the medium term.
4. Paper gold (ETFs) gaining popularity—ETFs continue to gain in
popularity given their advantages over holding the physical and project risk
around gold equities.
5. Gold price moderate compared to history—Although gold is close to 25
year highs, in real terms it remains well below its peak of $1500/oz. We
don’t expect a return to previous highs but a $650/oz price should not prove
a psychological barrier nor prevent strong fundamentals from driving it
higher.
6. Gold market small vs. other Investible assets—The total investible gold
market is small at only $200bn or around 0.5% of global equity markets.
This is likely to also underpin demand.
7. Deteriorating outlook for alternative asset classes—Another poor year of
equity market returns alongside slowing growth in property markets may
further raise the attractiveness of gold as an alternative investment class in
the year ahead.
8. Resumption of US$ weakening—an end to Fed interest rate tightening
may begin to place increased downside pressure on the US$ particularly
given structural imbalances and rising interest rates in the ROW.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News