ZLATO – je $1000/oz na obzore?

Although some market participants still view gold as the true store of value, the global financial system has been off the gold standard for nearly half a century and while the majority of central banks continue to hold some gold reserves, market demand for the yellow metal is far more a function of sentiment rather than value. After all, the reason modern economies moved to electronic is money is the sheer impracticality and inflexibility of the gold standard. After a few trips to the store it becomes tedious to pay for your carton of milk with gold coin.

Gold however, acts as a great counterweight to fiat currencies which inevitably become inflated and lose value as governments attempt to stimulate consumer demand by increasing money stock. Indeed, inflation sparked by escalating food and energy prices has been the dominant theme in the second half of 2007 amongst nearly all G-10 economies.

Gold also rises when investors lose faith in the fiat currency, which typically occurs during time of economic turbulence. The last great bull market in gold coincided with a very serious recession in the United States. Although few analysts predict a massive contraction in economic demand this year, the financial problems caused by the sub-prime fiasco are clearly not going away and should the credit crunch conditions lead to a significant slowdown in economic activity in 2008, they will likely create a further crisis of confidence in the US dollar and drive demand for gold.

Finally, massive reserve accumulation by emerging growth nations such as China, Russia and India has created vast pools of capital, most of which is invested in US fixed income securities. If these central banks choose to diversify even a small portion of their holdings into gold, the price for the precious metal is likely to rise. In fact China just opened its first gold futures exchange and prices advanced as much as 10 percent on the first day of trading. In short, continued inflationary pressures, continued monetizing of bad debts from the US housing sector and the possibility of Central Bank diversification ensure that gold’s future is likely to be bright as it targets the $1000/oz level in 2008.

Zdroj: www.stockhouse.com

13.01.2008

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value."   Alan Greenspan