Monday, August 2, 2010

David Rosenberg Still A Gold Bull

As reported by The Pragmatic Capitalist, David Rosenberg is still bullish on gold; he believes the current doldrums represent a buying opportunity. Rosemberg bases his optimism on more skeletons emerging from the financial-system closet.
Watering down financial regulation bills in the U.S.A., kicking the can down the road via less-than-onerous Eurozone stress tests and reduced capital stringency as per Basel III does not alter the deleveraging game that much and the rounds of market instability that will come our way.

The investment demand for gold remains quite solid at a time when production growth is still anaemic – the World Gold Council just released data showing that investors bought 273.8 metric tons of gold via ETF’s in Q2, the second highest tally on record (and brings net investment in these finds to over 2,000 tons value at just under $82 billion).

That last point about increased gold investment demand has been dented a little by recent outflows, but not by much. Even after those outflows, GLD's current holdings are more than 165 tonnes greater than they were in mid-January.

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