Monday, January 10, 2011

Outlook for gold in 2011: Fear and Love in Gold Trading - Holmes

Frank Holmes reckons the gold price will double over the next few years due fear of economic meltdown and love in the emerging nations with their propensity to accumulate gold.
Author: Frank Holmes
Posted:  Monday , 10 Jan 2011 
Wall Street has been calling gold a bubble since 2005 when it hit $500. Some media naysayers remained negative even as they wrote the headlines proclaiming record highs and saw gold rise almost 30 percent in the past 12 months.  
Interestingly, despite gold's latest run, it was still a laggard compared to many other commodities. In the commodity world, gold didn't even place in the top half in 2010. Against a basket of 14 commodities that includes everything from aluminum to wheat, gold's 29.52 percent return places it eighth. Palladium took the top spot with a 96.6 percent return, followed by silver with an 83.21 percent return. Natural gas continued its cellar-dwelling ways, dropping 21.28 percent to become the worst-performing commodity of the basket.
There are two main drivers of gold demand: The Fear Trade and the Love Trade.


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