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Bear vs Bull: What's Next for Gold?

BEAR VS "Bull . WHAT'S NEKT FOR GOLD Know When To Hold & Know When To Fold! THE INTEREST RATEGOLD HOW DOES IMPACT BULL A Low Real Interest Rate is Positive BEAR For Gold $1800 8% REAL RATE on 10-Year Treasuries The latest unemployment rates, disposable income, and budget as a percentage of GDP levels all point to an IMPROVING ECONOMY. $1200 10% GOLD PRICE 8% $600 Unemployment Rates -4% 4% $0 1970 1982 1994 2006 2013 $13,000/yr Disposable $11,000/yr REAL RATES are currently negative, which spurs investors to place their cash into non-depreciating assests. Historically, gold is a good investment when this occurs. Income $9,000/yr These improvements coupled with low inflation levels will lead to long-term increases in interest rates, which are BEARISH for gold. What is The ..... INFLATION IMPACTGold ? ON BULL BEAR Since 2008, the MO money supply has experienced a four-fold increase. CURRENTLY $3,109,805 During Quantitative Easing, bank lending has not increased proportionally, to the MO money supply. MILLION IN 2008 This means the money in circulation is far LESS than $750,000 MILLION expected. This DRASTIC INCREASE in the money supply is a potential catalyst for serious inflation. We may not see the inflation directly in the CPI data, but it is showing in other signs of the economy. Inflation -2 Rate 2004 2006 2008 2010 2012 Gold soared on predicted inflation expectations, but these inflation levels never came to fruition. The actual inflation rate stayed mostly below 4%. WHAT Guternational Gold IS The Impact On Bear BRIC economies are exporters of products; this means in order to remain competitive they want to keep their domestic currency WEAKER THAN THE US DOLLAR This USD strength is a key reason why gold prices will remain bearish. Global demand was DOWN 19% DEMAND Bull for gold has become increasingly more global. CHINA from Q4 2012 on the realization of STRENGTHENING economic conditions and LOWER forecasts for inflation. INDIA are now the TWO LARGEST consumers of gold. Physical buying is hitting RECORD HIGH levels. Physical gold buyers tend to have a longer-term outlook on gold and are not worried about short-term volatility. (SHORT TERM GOLD веaR There is no reason to fight the current price action; price action is the best short run indicator. BULL 1900 SEASONALITY 1800 Major technical support was broken at In the short-term it appears gold is bottoming as it enters seasonal strength. 1700 1600 $1550 1500 2011 1400 15% 5 YEAR AVG. 1300 10 YEAR AVG. 1200 10% 2011 2012 2013 5% Sell side volume in ETFS is at record highs, including gold breaking the 200-day moving average on the weekly chart at $1450. 0% -5% -10% JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Historical COT reports indicate commercials are the most net long in gold futures that they have been in 8 years. Gold has had SIGNIFICANT sustained moves to the upside using this indicator. Additionally, the price of gold is close to the average all-in cash cost of gold – this represents a producer price floor. ong GOLD TERM Bull Boon Bear ПУ The long-term view of gold is EXTREMELY POSITIVE While gold is a finite resource, it is a commodity and NOT A CURRENCY. You cannot pay taxes or buy groceries with it. Gold is only worth what another person is willing to pay for it. Gold is a finite resource and is a store of value. Countries will not be able to finance their debt at higher interest rates, which suggests a LOW Gold pays no dividends and appreciates on FEAR and INFLATION levels. In a competitive market, price equals marginal cost. In relation to gold, this is equal to the all-in cost of production. TO NEGATIVE real rate, in the longer term. If real rates are BELOW 2% there is no reason to keep cash; the money will flow into assets that hold value such as gold. PRESENTED BY American Bullion The Gold IRA Experts. Request a Free Gold Guide to learn your options: 1-800-547-8418 GoldSeekycom Cambridge House INTERNATIONAL Your source for precious metals information and financial truth! Canada's largest investment conference company 00 Euro Pacific Special thanks to Dima Kash, Research Associate 000 Canada VISUAL CAPITALIST Educating a new generation of investors on resource investing and management VISUAL CAPITALIST Top Sources: - After the Gold Rush (June 1 2013) For a complete list of sources, please visit: ID

Bear vs Bull: What's Next for Gold?

shared by visualcap on Jun 24
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How should investors approach sub $1,300 gold? Our analysts each take a side and answer five questions – here we present the Bull and the Bear case.


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