January 7, 2011 – 10:24 am
The recent pullback in gold prices that has seen the yellow metal fall 3.5% this week will prove shortlived, according to the latest outlook from Nick Barisheff, president and CEO of Bullion Management Group Inc.
Mr. Barisheff believes the price of gold will climb to US$1,700 to US$2000 per ounce over the next twelve months, representing a gain of at least 20% from the Dec 31 close of US$1420.
“Without any new financial crisis, both mid-term and long term trends are in place to ensure gold and silver will continue rising through 2011 and well beyond,” he said Wednesday at the Empire Club of Canada’s 2011 investment outlook luncheon in downtown Toronto,
The catalysts that will impact gold nearer term include a weaker U.S. dollar, increasing demand for gold in China, both official and public, and more central bank buying by most of the BRIC nations.
“[They] need to acquire gold to bring their gold reserve ratio to outstanding currency closer to Western central banks,” he said.
Longer term, Mr. Barisheff noted three irreversible trends that will continue to boost demand for gold; an aging population, outsourcing and peak oil.
“These three mega trends will continue to lower the GDP, lower the tax revenue, create higher trade deficits, create higher unemployment, resulting in the need for further currency creation,” he said.
“This will cause inflation to rise as currencies depreciate in value and create higher universal debt. All of this means the gold price will continue to rise.”
Read more: http://business.financialpost.com/2011/01/07/unstoppable-gold-could-hit-us2000-this-year/#ixzz16OMpnQWf
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