Tags: gold | bill oneill

O'Neill: It's a 'Perfect Storm' for Gold

Tuesday, 29 Jun 2010 10:08 AM

By Dan Weil

Share:
A    A   |
   Email Us   |
   Print   |
   Forward Article  |
  Copy Shortlink
Gold, which recently surged to a record high $1,265, still has plenty of room to rise, many experts say.

Concern about the explosion of sovereign debt worldwide, low interest rates, and anticipation of gold purchases by China have put the precious metal in a sweet spot. Low rates make gold attractive compared to fixed income investments.

“There is a perfect storm for gold,” Bill O’Neill, former head of commodity research at Merrill Lynch and now a partner at Logic Advisors, told CNBC.

“The metal has become the ultimate currency, as few want to commit to the euro, pound or yen. And while the U.S. dollar may be the best of a weak lot, it also holds little appeal.”

Central banks are shifting some of their currency reserves to gold, which also will boost the metal, O’Neill says.

“Central banks will actually be net buyers of gold in calendar 2010 and I suspect 2011 as well.”

Investors maintain that the huge fiscal and monetary stimulus implemented globally to guarantee economic recovery will come home to roost as inflation and currency weakness.

And that’s great news for gold.

"The Goldilocks scenario continues,” Ole Hansen, a senior manager at Saxo Bank, told Reuters.

“Risk-off helps gold through safe haven (buying), risk-on helps it as well, through a weaker dollar."

Some experts see the good times continuing as long as 10 years, pushing gold as high as $8,000.

© 2014 Newsmax. All rights reserved.

Share:
   Email Us   |
   Print   |
   Forward Article  |
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
You May Also Like
Around the Web

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved