Gold price12 Jul 2013 13:29
It's nice to see that not all comemtators are pessimists, there is still life left in this share.
"the probability of a sizable and sustained decline of, say 15% to 20%, seems considerably less than the probability of a similar long-lasting percentage advance" for gold. And, should gold dip below its June low, the sell-off likely would be short-lived, says the managing director of American Precious Metals Advisors and senior economic adviser to Rosland Capital. Nichols says physical demand and dealer restocking is picking up across Asia. He also suspects the central banks of China and Russia may have resumed or accelerated gold acquisition programs. "Physical gold markets, which in the past couple of years have been losing the tug-of-war with paper markets, may now be on the ascendency, regaining their influence in setting the metal's price," Nichols says. He also says these are long-term buyers unlikely to part with their recently acquired gold. The analysts also cites a rising lease rate for borrowing gold, as well as a high premium in China. "We have long argued that this scarcity of physical gold may result in a surprisingly high-powered advance in the price of gold when institutional selling has run its course and Western market psychology sheds its extreme negativity," Nichols concludes.
By Allen Sykora of Kitco News; asykora@kitco.com