Struggling American Dollar and Increased Demand Are Factors; Regulations May Toughen as Gold Pushes to $1500 in Two Years
With more than 150,000 tons mined into production since its discovery, gold continues to maintain its rarity. Countries such as the United States, China, Australia and the Republic of South Africa are currently regarded as the primary gold producers although annual mining efforts in these locations are less than 2500 tons. Gold is recognized as having several sides which include construction, currency, investments and jewelry. Much of the rise in values is considered from investment and currency options such as gold bars, gold coins and exchange trade funds (ETF).
A remarkable world demand in 2009 between April and June for more than 415 tons of gold has inflated the demand 2.6 times what it was during the same time last year. Combined with the economic crisis in the United States and an unstable platform for the dollar, gold has experienced an increase in price to over $1200 per troy ounce this month.
As the Federal Reserve Bank (FRB) has given no indication that it will change the low interest policy, there is an open flow from dollar assets to high interest currencies and the commodity market; more specifically, gold. This movement of money has created speculation that as the value of gold rises, those positioned to make strategic gains with gold currency may be able to write their own ticket.
According to James Burbage, III, CEO of Lloyd’s Asset Management, gold has built up some momentum and will rise to $1500 in two years. “As gold continues to rise, individual investors who have new money to invest in large quantities will definitely see remarkable returns on their investments,” Burbage said, noting that the confidence in the dollar will affect the price of gold but that this confidence is building on the regular. Clearly the U.S. market will continue to grow and re-strengthen, and those who are keeping a close eye on this particular economy will move with force and intention.
The ability of the U.S. Commodity Futures Trading Commission (CFTC) to greatly influence the strength of gold should not be underestimated. Currently, conditions exist where these regulations continue to gain authority, causing an increase in the search to find a “loophole” with ETF products. The alternative has been to turn to over-the-counter products because the regulations governing them are not as stringent.
“It is a good idea to keep an eye on the status of the world economy in terms of gold,” Burbage indicates. “Gold continues to rise with the increase directly affected by the American dollar.” Money is flowing and opportunities abound with gold before strides are taken towards tougher regulations.
About James Burbage III & Lloyds Asset Management
James Burbage, III, has created a firm whose name is synonymous with the highest degree of ethics and professionalism in the precious metals investment industry. With clients around the globe, Lloyds Asset Management has the experience, financial experts and state-of-the-art technology to provide seasoned counsel for a broad spectrum of investors.
