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Gold : From the Situation Room

February, 21 2013
Gold Back to Fundamentals… Buy Low and Sell High !

Implications of a world floating on fiat currencies, and that government “solutions” to debt and deficit spending will significantly — perhaps catastrophically — dilute the value of currencies, the fallout of which has yet to materialize. And that’s how a number of prominent investors and institutions are viewing the price action right now. None of these parties think the gold bull market is over, nor that the price is too high.  As for me, I think that the longer the malaise continues, the more likely the breakout is to be both sudden and dramatic. 

We can all speculate about when the next leg up for gold will kick in, but the point for now is to take advantage of the weakness. When the price breaks out of its trading range, are you sure you won’t wish you’d bought a little more?

Investlogic is glad to share that interview with Ronald Stoeferle. Why we are willing to to bring this quality interview to you in this issue is that the content fully supports my own views on the current situation of gold and what the future brings. We recommend  you to read carefully this interview and judge for yourself. this piece of information could turn out one of your best tools to define your thinking and opinion about gold and instrumental in taking your right decisions to benefit from what will be coming to us in the next few years. 

SEE Gold Price Forecasts Become Bearish, Analyst Stoeferle Bullish

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  • Prudent pension funds and central banks will continue to diversify into gold.
  • Owning physical bullion will likely reward in 2013 and in the coming years.
  • The precious metals of gold and silver will again be essential diversifications for anyone wishing to protect and grow wealth in what will be a volatile 2013 and in the coming uncertain years.

What kind of Gold investor are you ? Define your profile and the corresponding strategies

Gold Remains An Historically and Academically Proven Safe Haven. 

It remains very important that investors and savers understand gold’s importance as a safe haven asset and form of financial insurance.

There remains a significant lack of understanding regarding gold and gold’s role as a diversification, a store of wealth and a wealth preservation asset. Some continue to focus solely on gold’s price and not its value as a diversification for investors and savers. Many have been suggesting that gold is a bubble for a number of years and few have ever admitted how wrong they were with regard to predictions that gold prices would fall sharply. 

Whether gold is a bubble or not is not the fundamental question. What is far more important is that there is now a large body of academic and independent research showing gold is a safe haven asset. Numerous academic studies have proved gold’s importance in investment and pension portfolios – for both enhancing returns but more importantly reducing risk.

Gold in 2013

Some market participants and non gold experts tend to focus on the daily fluctuations and “noise” of the market and not see the “big picture” major change in the fundamental supply and demand situation in the gold markets.

This is particularly due to investment demand from high net worth individuals, from hedge funds, from China, the rest of an increasingly wealthy Asia and of course creditor nation central banks. Macroeconomic, systemic, geopolitical and monetary risks have abated somewhat but remain and could intensify rapidly in 2013.

The eurozone debt crisis is far from over and will become an issue again in the coming months as will debt crisis’ in Japan, the UK and the U.S.

Support for the price of gold should also come from the rising global money supply coupled with increasing investor and central bank purchases which have been driven by falling real interest rates and concerns about the euro, the dollar and other fiat currencies as stores of value.

Tighter monetary policies, as seen in the late 1970s, would likely help alleviate fears of further currency debasement but it is extremely unlikely that this will be seen in 2013. Indeed, ultra loose monetary policies, negative real interest rates, debt monetization, competitive currency devaluations and global currency wars look set to continue – if not intensify.

SEE : Relationship between gold and interest rates

Geopolitical risk remains very underestimated. Geopolitical tensions are particularly evident in the Middle East between Iran and Israel and many western powers. There are also tensions between western powers and Russia and indeed China and these could intensify in 2013. These macroeconomic, systemic, geopolitical and monetary risks are leading to increasing investment and store of value demand from the smart money such as Bill Gross, Jim Rogers, George Soros, Marc Faber and hedge fund managers such as David Einhorn and Kyle Bass.

Macroeconomic developments likely to influence gold in 2013-World Gold Council- by

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