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Warren Gilman Says Gold is a "Must Have"

Release Date: 
Monday, July 9, 2012

Gold prices rose on Monday as the dollar fell.  Gold was $3.50 higher at 7:11 a.m. Pacific Time on the New York Spot market, trading at $1,586.90 per ounce.  Spot silver was $0.32 higher, trading at $27.52 per ounce.  (Click here for the most current spot prices.)

China's statistics bureau released data on Monday showing consumer-price inflation fell to 2.2 percent for June, its lowest level in 29 months. Producer prices also fell, contracting 2.1 percent.  HSBC analysts described the inflation data as "fast falling" and said allowed the government to shift to aggressive policy easing. "Beijing policy makers are responding actively to hold up growth," HSBC analysts said in a note.

Analysts at GFT Markets said in a note on Friday that the future trend for the precious metals would likely depend on whether the U.S. Federal Reserve institutes a new round of quantitative easing.  Economists surveyed by Reuters believe there is a 70 percent chance the Fed will implement another multi-billion dollar round of quantitative easing. That estimate has increased from around 50 percent in late June.

Warren Gilman, Chairman & CEO at CEF Holdings says he is a long-term believer in gold, and is confident that the precious metal's price will rise.  "...I think traders are, frankly, missing the point in gold," Gilman said.  "Gold is a ‘must have' in the current environment.  It's certainly something that you want in times of high risk....In the long run, I think gold will come to the fore in terms of a ‘risk-on' trade and a ‘risk-off' trade.  That ultimately, in this environment, where you have negative real interest rates, and you have central banks acquiring gold at historic levels over the last few years, the gold price will eventually rise."

(Sources:  "Gold edges higher after previous week's drop," MarketWatch, July 9, 2012; "Gold hovers near two-week lows as U.S. outlook cloudy," Reuters, July 9, 2012; "Gold a 'Must Have' for Current Environment: Pro," CNBC, June 27, 2012)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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