structural deficit in gold supply could send prices higher

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aitakahashi

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structural deficit in gold supply could send prices higher

posted on Nov 27, 2008 07:17AM

this was written by dorothy kosich, she suggests that at least one central bank has become a gold buyer, and that china is the most likely suspect:

Based on the assumption that current strong physical gold demand highlights an existing supply deficit, Toronto's Wellington West Capital Markets forecasts that, "if the increased structural deficit in gold supply continues, gold prices should adjust higher."

Wellington metals analysts also advised, "Given the potential change in market fundamentals, we believe it is time investors revisit investing in the junior and intermediate gold producers."

The analysts said their data indicates that a Central Bank Gold Agreement (CBGA) signatory "has become a gold buyer, putting further pressure on the existing supply deficit in the bullion market." In their analysis, Wellington suggests that China is building a strategic gold reserve.