Gold Bull Says Gold Becoming Preferred Alternative To Government Debt

That's according to a Bloomberg write-up on his words. Philip Klapwijk, executive chairman of research company GFMS Ltd, said that gold was likely to go to $1,300 later this year or next year. He also pointed to the fact that investment demand was higher than jewelry demand last year as an encouraging sign for the metal.

“Investors are focused very much on deterioration in credit quality” of governments, the GFMS executive said. That focus on European governments “at some point” will shift to the U.S. “given its fiscal position is at least as bad as some of the European countries,” he said.

Government and other “official sector” gold sales may “blip up” this year after falling to about 1 percent of gold supply last year, he said. The International Monetary Fund still has 191 metric tons of gold for sale that will probably be sold on the open market, he said.

I note that more skeptical, or cautious, analysts would point to the eclipsing of jewelry demand by investment demand as a danger sign.