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OUTLOOK 2010
Nine bullish arguments
that have not changed much in recent quarters:
- Global monetary and fiscal reflation will continue: lingering financial crisis today, rising retirement costs tomorrow
- Global imbalances mean the dollar must adjust downwards
- Global FX reserves are "excessive", meaning diversification out of dollars is likely (into SDRs, other currencies, gold)
- Central bank attitudes towards gold have changed (India buys IMF gold, China adds gold to reserves, etc.)
- Gold is too "cheap" for an official "monetary role"
- Mine supply is flat – supply growth is anemic ("peak" gold?)
- Investment demand is in a long-run uptrend due to fears of inflation, currency debasement, portfolio considerations
- The commodity price cycle has many years to run
- The geopolitical environment will continue to favor gold
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