Time To Buy? Gold To $2400/oz And Higher

Mar 5, 2012 by

Today we hear some bold claims from Citigroup as referenced by Zero Hedge.

Gold is being supported by Asian physical demand, which has picked up again and was robust in Asia overnight. Asian jewellery makers are reported to have been using this dip to stock up on gold.

Besides Asian jewellers, many Asian money managers and hedge funds continue to see the value in the yellow metal and buy on price weakness.

Gold is also supported by good retail and institutional demand internationally as seen in the new record ETF gold holdings last week. CFTC data shows that hedge funds, bullion banks and other institutions also remain positive on gold and increased their net long positions last week – rising by 12,259 contracts or 7% from a week earlier.

The EU’s second 3 year funding and a surprise policy easing by the Bank of Japan a few weeks ago has pressured the euro and the yen making gold increasingly attractive to holders of these currencies. Economists believe that the ECB will keep interest rates low at 1% until deep into 2013 on economic concerns and despite high oil prices and the impact of the money that they’ve flooded into the market.

Continuing negative real interest rates and global currency debasement are strong fundamentals leading most analysts to forecast much higher prices.

Citigroup have said that they believe that gold will rise to $2,400/oz in 2012 and by $3,400/oz in “the coming years”.

Many have been calling for $2000+ gold over the last year or so.  However, rarely have you seen a large financial firm call it until recently.  What does this mean for preppers?

Having physical gold is a must for any SHTF plan.  Ideally it should be coins but bullion is also useful when things get tough.  The reason coins work a bit better is that you can barter for smaller items where as bullion tends to be bit bigger.  Be sure to go with a reputable dealer when purchasing gold and there are many scams out there.

If you cannot get your hands on physical gold, then an ETF may work well for you.  GLD or GDX (gold miners ETF) are good choices that can be a bit cheaper than buying the real thing.

Either way, if the SHTF, you can bet on a rise in gold.

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