The Case For Gold Staying In Four-Digit Range

As webbed by the Telegraph Online, co-portfolio managers of the Investec Global Gold Fund explain why they believe gold won't fall below $1,000. In the words of those co-managers, Bradley George and Daniel Sacks:

In our view, a below par recovery in the face of constrained consumer spending is more likely to continue to encourage gold investment, due to expectations that fiscal and monetary stimulus is likely to continue to fuel large government deficits and pose risks to the longer-term value of the US currency....

Near the bottom of the article, they list four reasons why they think gold-mining company shares are undervalued right now:

- The high and rising gold price.
- Costs have stabilised (energy and materials costs are falling).
- Weaker producing currencies, which further widens margins.
- Relative to the gold price and to their usual valuations, gold shares appear oversold.

They're clearly talking their book.