100 Reasons to Buy Gold and Gold Equities
Morgan Stanley, U.S. and the Americas Investment Research - April 6
Reason #39. In the long term, the Asian crisis will re-establish gold's role as an unrivaled store of value; gold held its value over the past year while currencies plunged 70% or more.
44. Liberalization of the gold markets in India and China continues to increase, providing increased access to populaces with a high gold affinity.
48. Production from the largest gold-producing country, South Africa, is mired at a four decade low; average cash costs of $300/oz are the world's highest.
49. Environmental and permitting restrictions are becoming increasingly burdensome in North America and Australia; lower supply in the future.
50. Up to 70% of the world's gold production is uneconomic on a total cost basis at $300/oz gold; lower supply in the future.
51. Worldwide exploration activity is down significantly; lower supply in the future.
52. Mine closures/reductions increasing (e.g., Mount Todd, Lupin, Homestake, McCoy Cove, Paddington, Colomec, Hope Brook, Freegold).
53. Mid-1997 labor accord in South Africa has cleared the way for labor reductions and shaft closures.
54. Mine supply was artificially high in 1997 due to high-grading - the high grading was done at the expense of mine lives and is largely unsustainable.
55. There have been few major technological breakthroughs in gold mining since heap leaching in the 1980s; none appear to be on the horizon.
83. Possibility that a Buffet-like figure could go long gold and trigger a rally as Buffet did for silver.
87. Comex short interest is 10-15% off its 1997 highs, but . . .
88. . . . funds are still solidly short; they'll rush to cover when the tide really turns. |
