Nikkei Financial – Gold assumes its role as the ultimate store of value.
Asia-based private fund, “Nikkei Financial”, has apparently told clients that gold has reasserted its position as the ultimate store of value. In an un-scheduled client e-mail, the firm said that the secular bull market in gold had far further to run but warned that clients should avoid buying in at current levels.
“Nikkei Financial’s” sources say that this is because the gold price is due for a correction and a period of consolidation which, according to technical analysts at the firm, is an essential part of maintaining a healthy bull market trend.
Contrary to the opinions of many commentators, “Nikkei Financial” believes that the weakness of the US dollar is playing a less significant role in the advance of the gold price than originally thought. Instead, the firm believes that increased buying from central banks around the world is effectively drawing a line under the price.
One of the sources cited the fact that, at the beginning of 2009, the prospect of some 400 tons of IMF gold being released onto the market was considered to be a potential dampener on hopes for a higher gold price but the purchase by the Indian central bank of some 200 tons at or close to the spot market rate has sent a signal to the markets that emerging nations placed a great deal more importance on the value of gold than their Western counterparts.
“Nikkei Financial” are thought to expect that the US dollar will continue to decline during the course of the next year although they do warn clients that the possibility exists for short, sharp rallies.
