Four reasons gold will remain firm and strengthen - Blanchard Chair

Blanchard Chairman, Donald Doyle sees numerous reasons that point to gold's nine-year bull run continuing in both the near and long term.

GRONINGEN - 

In a release put out by Blanchard yesterday, Chairman and CEO, Donald Doyle, points out four signs that the gold price is going to improve:

The first reason he says, is "Central bank demand for gold is likely to continue to grow, with Russia and Venezuela adding to their reserves."

The second sign is that interest rates in the largest global markets remain near zero. Which he says makes "ownership of non-yielding gold favorable and prudent, as it is a currency that cannot be debased by governments or central banks.

"Continuing low rates and currency risk that is prevalent in the market should lead to gold remaining firm in all currencies," he adds.

The third factor he mentions is that China continues to explore severing its links with the U.S. dollar. This he says, should make the yaun appreciate in the medium- and long-term.

"With China's vast dollar holdings, there should be continuing investment and central bank diversification into gold," he adds.

The final point Doyle makes is about Europe, "There are legitimate concerns with the European monetary union, and the outlook for sovereign debt markets internationally is uncertain," he says.

He is not, however, the only gold expert to think along these lines. Jeff Nichols, reiterated the position he outlined on the Mineweb Gold Weekly Podcast, last week when he spoke to Moneyweb CEO Alec Hogg on Tuesday saying, "All the major industrial nation currencies are reflecting problems in the western economies - problems that are being addressed by easy money and low interest rates that ultimately are going to be reflected in higher inflation and depreciating purchasing power for all these currencies. The question really is not which one is stronger or weaker, but how long it is going to take for them all to be reflected in the rising gold prices."

He adds, "I don't think we will ever see gold below $1000 again. I think the things that are happening now in the world of gold are changing the future in ways that we might not have guessed a few years ago.

"The world of gold is expanding demographically in terms of the number of systems, the types of systems. We have more people with access to gold than ever before, in part thanks to the introduction of new investment vehicles. Exchange-traded funds (ETFs) are one example but if you go from country to country there are vehicles and products that are designed for local markets. In India for example we have little coins that are distributed through the postal service."

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