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Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (500)	11/23/2003 10:40:56 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Gold bulls wait for further dollar slide By Kevin Morrison Published: November 21 2003 16:02 \| Last Updated: November 21 2003 16:02 [oh, and I'm waiting for a dip, well never mind, ill just have to wait longer. Morrison has a similar piece in todays FT, with this as the final paragraph.. "Gold was quoted at $397.15 a troy ounce, just a few dollers short of $400, a level bullion has only remained above for six months in total since 1990. But even that track record did not deter some projections of gold reaching $8000 an ounce" ...pb] news.ft.com Gold's break through $400 a troy ounce and the US dollar's fall to a new low against the euro this week gave gold bulls plenty of optimism for further gains in bullion prices. The relationship between the US dollar and gold has been close in recent years. Gold has risen 57 per cent since touching a 20-year low of $250 per oz in August 1999, and the US dollar has dropped about 35 per cent since its high against the euro in October 2000. Investors are expecting a further slide in the US currency. Daniel Chornous, chief investment officer at RBC Investments, forecasts the dollar to fall by at least 10 per cent during the next 12 months, which augers well for gold. "The US has a twin deficit that equals 10 per cent of its GDP - that structural issue has to be fixed before we can start to see any long-term accretion in the US dollar," Mr Chornous told a gold conference on Friday. Nick Barisheff, president of the Millennium gold fund, said the growth in US money supply over the past 30 years was another concern for the dollar. "US money supply has risen by 1,300 per cent since 1975 - the amount of the increase in money supply last year equated to the total amount of money in the US economy in 1975," he said. "You can only print so much money before there is serious erosion in value." John Hathaway, managing director at Tocqueville Asset Management, said gold has fallen in value compared with other luxury goods items. "Twenty years ago, a Saville Row tailored suit would have cost an ounce of gold, which was about $400 at the time, a Saville Row tailor recently told me a good suit costs about $3,000 today," he said. China, which is a major influence on many commodity prices, but is so far a small player in the gold world, may yet emerge as a bigger factor on gold prices. A representative of China's central bank, the People's Bank of China, told a gold conference in London yesterday that China may buy more gold for its central bank reserves. China has increased its gold holdings by a third in recent years to 600 tonnes worth about $12.4bn, or a fraction of its $380bn in official foreign reserves.