Here
is the exclusive Gabelli & Company piece for KWN where they are forecasting
significantly higher prices for gold: “Near
the start of 2013 we find that many financial commentators expect gold to
underperform most asset classes citing the duration and scope of its performance
over the past decade and the feeling that economic and financial normalcy is
just around the corner.”
“We will see if this is the
case but we note that investor sentiment towards gold, in the developed western
economies, is low. In the past this has been a useful buy signal. The current
poor sentiment probably reflects the recent trading history of the gold price
which has been in a range between $1,550 and $1,800 per ounce.
We tend think that the world’s monetary authorities
will continue with their grand monetary experiment and as a consequence retain
our constructive outlook for gold and recommend that all long term investment
portfolios should have an allocation to gold and gold equities.
To the extent that the gold price reflects money
creation, it is unsurprising that its price performance, although positive, was
muted in 2012. After all the total assets of the Federal Reserve (Fed) barely
changed during the year. This was a surprise to many, including us, who had
expected the Fed to continue to add assets to its balance sheet. Actually from
about $2.92 trillion at the start of 2012 its assets fell to a low of $ 2.80
trillion by the end of September.
Since then they have climbed back to $ 2.92 trillion
by early January 2013 to show a 0.6% rise for the year. We expect this to
change in 2013. In September 2012, the Fed announced their intention to
purchase $40 billion of mortgage securities each month for an unlimited length
of time..."
No comments:
Post a Comment