• Print
• E-Mail

Inflation will be with us and accelerate until it has conquered deflation and restored economic confidence to former levels. We cannot foresee that happening with the people, tools, and plans being used to patch up the global economy, so far. So gold will confirm the resumption of its long-term upward trend. The gold market fundamentals will affect the price in an upward direction as production of gold continues to hold or fall, while investment demand will grow substantially.

Central Banks are slowing the sale of their gold to a trickle, so we would be surprised to see total sales for this year more than 150 tonnes, an amount that will not affect the gold price at all. But imperceptibly and certainly not for publication, central bankers are weighing up the benefits of their present policy of building confidence in currencies through gold sales. In fact currencies have not and will not benefit from such sales any longer. As Prime Minister of Britain, Gordon Brown has and is experiencing, sales and talk of future sales of gold simply undermine the credibility of politicians and central bankers in the face of the growing popularity of gold and falling confidence in currencies. But most important of all is the clear signal now being seen that the prospects of stability, of effective monetary reform or of systemic health is fast disappearing, leaving us with volatility, fear and doubt, in the future. The reliability of 'normal' investments is fast diminishing. The attraction of the obligation-free, nationality-free and global acceptability of gold will create a vibrant, rising market for gold and with it, following behind, gold shares.

Gold shares are tied to the uncertainties of corporate risk, but gain in profitability far more than the gold price in percentage terms when the gold price rises. They have lost attraction over the last two years as investors favored the gold Exchange Traded Funds where there is only a risk on the gold price. However, the returns on some gold shares are now extremely attractive because their prices have fallen so far.

All in all, we believe that 2009 will prove to be one of the most exciting years for gold that we will ever see!

In conclusion we have the opinion of the one man who respected gold yet worked so hard to sideline it in favor of dollar hegemony. On May 20, 1999, Alan Greenspan testified before Congress, "Gold is always accepted and is the ultimate means of payment and is perceived to be an element of stability in the currency and in the ultimate value of the currency and that historically has always been the reason why governments hold gold."

Gold Forecaster regularly covers all fundamental and Technical aspects of the gold price in the weekly newsletter. To subscribe, please visit www.GoldForecaster.com

Legal Notice / Disclaimer This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina, have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina only and are subject to change without notice. Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.