Gold News

Gold: Why the Bull Market is Far From Over

Surging oil prices and the ongoing credit crunch continue to make Gold Investment attractive...

MANY ANALYSTS are talking of the end of the credit crunch, writes Julian Phillips of the GoldForecaster.com.

   Some say that the bull market in Gold has therefore suffered severe damage, which will affect its long-term prospects.

   If we were to accept both these statements, then it would appear that the long-term uptrend in Gold Prices is indeed. But are these statements acceptable? Do they reflect the true picture underlying the Gold Market? To get the proper perspective let's stand back and look at the big picture.

Gold Bull Market: Is the Credit Crunch Over?

   Not according to the International Monetary Fund (IMF). It assessment is that potential losses as a result of the credit crisis could near $1 trillion all told. It also warns that further losses and write-downs on prime mortgages, commercial real estate, leveraged loans, and consumer finance are likely.

   The IMF's Global Financial Stability report put worst-case credit market losses at $945bn as of mid-March, with more losses expected for months to come. The report also stressed the fact that the credit crisis was impacting the full spectrum of the financial market in one way or another, with losses distributed between banks, insurance companies, pension funds, hedge funds, and other investors.

   We note that credit card finance – alongside car finance bonds – has been included in the new range of assets acceptable to the US Federal Reserve as collateral for loans to US banks. That tells us the deeper losses in consumer credit are not over by a long shot.

Gold Bull Market: The US Trade Deficit

   February saw the US record a trade deficit of $62.3 billion against a January deficit of $59bn. With oil prices now over $120 a barrel and Chinese imports still cheaper than local products, the prospects are for a worse annual trade deficit than ever before. And there is no real sign that this deficit is dropping.

   With Opec talking of a potential oil price of $200 a barrel, something has to be done to stop more than a decline in the Dollar. A stop must be put to the massive global scramble for resources by a combination of the developed world and the emerging world, because prices will continue to rise until they are so high that some will have to do without.

   This problem is about the massive rises in demand with far greater ones to come.

   So are there solutions in the pipeline? It seems that the only solutions available to the authorities are existing market controls and proposed market controls on all types of markets, but not on a globally coordinated front. Unless there is global coordination such control will be completely inadequate.

   Are you structured to avoid the pernicious effects of government controls and meddling? If not, and you'd like to learn more, please contact us through gold-authenticmoney@iafrica.com.

   Because the actual prices of gold and silver could become simply academic in the coming scramble to own physical bullion, outright and outside the reach of politicians.

JULIAN PHILLIPS – one half of the highly respected team at GoldForecaster.com – began his career in the financial markets back in 1970, when he left the British Army after serving as an Officer in the Light Infantry in Malaya, Mauritius, and Belfast.

First he worked in Timber Management and then joined the London Stock Exchange, qualifying as a member and specializing from the beginning in currencies, gold and the "Dollar Premium". On moving to South Africa, Julian was appointed a macro-economist for the Electricity Supply Commission – guiding currency decisions on the multi-billion foreign Loan Portfolio – before joining Chase Manhattan and the UK Merchant Bank, Hill Samuel, in Johannesburg.

There he specialized in gold, before moving to Capetown, where he established the Fund Management department of the Board of Executors. Julian returned to the "Gold World" over two years ago, contributing his exceptional experience and insights to Global Watch: The Gold Forecaster.

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/Julian D.W. Phillips have based this document on information obtained from sources they believe to be reliable but which it has not independently verified; they 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/Julian D.W. Phillips only and are subject to change without notice. They 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, they 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.

See full archive of Julian Phillips.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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