Whats going on with the Gold Market

Due to concerns of negative real interest rates, global currency debasements, and overall strong fundamentals for the metal – analysts are forecasting gold to much higher prices. Citigroup, for example, believes gold will reach $2,400 an ounce in 2012 and $3,400 an ounce in the “coming years”.

Morgan Stanley says to remain in gold as an investment, even after Bernanke’s comments last week were interpreted as signaling less chance of QE3. Last week was believed to be profit taking predicated by news and media with no major change in fundamentals. Those fundamentals that give signals for higher prices remain intact with a long-term uptrend in the metal.

Central banks will buy 300 metric tons of gold this year, Royal Bank of Scotland Plc said. China, Russia and India have been the biggest buyers and Switzerland, France and the Netherlands the biggest sellers since the first European central bank gold agreement to limit sales.

The fundamentals of significant macroeconomic, systemic and monetary risk will support the precious metals. As will the increasingly risky geopolitical situation – the risk of which is not priced into markets just yet. Swiss money manager and long term bear Marc Faber, says precious metals and equities investments offer some safety to worldwide political conflict. The number of analysts predicting the price to cross $2,000/oz are increasing, insisting on the strong upside potential mainly due to quantitative easing (QE) measures by the US Federal Reserve and European Central Bank.

» Contact Cornerstone Asset Metals today to learn more about buying gold and silver as an investment.

Past performance is not an indication of future potential values.

“I like to think of the gold position as a kind of stock insurance,” CNBC’s Jim Cramer says in a Dec. 30 lesson in investment diversification. “Now, would you want a home without homeowner’s insurance? No. You wouldn’t own a car without car insurance. You shouldn’t invest without some gold exposure because gold pays off when everything else fails.”

Jim Cramer does recommend the largest gold exchange-traded fund, however Cornerstone Asset Metals believes your primary long-term gold holding should be in physical bullion under your control. Unlike gold bullion, ETFs are susceptible to external counterparty risks.

Related articles:

» Best way to invest in Gold

» Gold is an asset class and must be owned – Jim Cramer

Contact Cornerstone Asset Metals today to learn more about buying silver as an investment.

Past performance is not an indication of future potential values.