The worst thing you could do right now… is sell gold. This is why. The gold price has been stagnating for a while now and is caught between $1,170 and $1,250. Nevertheless, there are forces at work behind the scenes that could push the gold price a lot higher. We list them below here:
# China is creating a gold investment fund for central banks. More than 60 countries have already invested in this fund. This fund needs to raise $16 billion to invest in gold mines in the Silk Road region.
# China could push the price of gold up by at least $200 according to Steen Jakobsen of Saxo Bank. The billions of dollars invested in Silk Road could take up a lot of money meant for infrastructure works in Europe and the US. This could raise commodity prices and push the West into a recession.
# Red Kite is launching a new fund for base and precious metals. This fund is already managing close to $1 billion in stocks, loans, and royalties, especially for junior miners that have trouble accessing capital.
# Texas has passed a law, which makes gold and silver valuable means of completing a transaction again. The law was passed 29 to 2.
# Gold smuggling is exploding in China. This past year Indian customs has seized 3,500 kilograms of gold, an increase of 900% in 2 years’ time. It is generally expected that customs can only intercept 10% of all smuggled gold.
# Austria is repatriating 110 tons of gold from the vaults of the UK.
# CI Investments, a Canadian fund, purchased 6,117,900 shares of Gold Trust last quarter, good for an investment of $703.6 million. This makes gold its largest position, ahead of Apple stock.
# Institutional investors added 45,000 long positions in gold to their funds, this is the biggest increase since the end of July 2005, for silver we would have to go back to 1997 to see such an increase.
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