Tuesday, June 14, 2011

Standard Chartered: "Three Factors Will Drive Gold To $5,000"

I trust faithful readers will forgive the recent indulgence in posts about hockey, the Stanley Cup and the Vancouver Canucks. As with real estate, the topic of hockey has consumed the Village on the Edge of the Rainforest lately.

But that doesn't mean our attention is completely diverted away from real estate, the global economy and the interest in Gold/Silver as a result of sovereign debt.

And today our attention is caught by a report released by Standard Chartered Bank.

Standard Chartered provides personal and business banking services in Asia, Africa, the Middle East, UK, Europe and the Americas and their recent report, "In Gold We Trust",  looks at actual gold breakeven prices, production bottlenecks, central bank interest, and Chinese and Indian buying, and comes to the conclusion that $5,000 gold may just be a matter of time.
  • "The limited supply comes at a time when central banks have completely changed their tune on selling down their gold stocks and now appear likely to accelerate their net buying programmes. China is way behind the curve. Currently, only 1.8% of China’s foreign exchange reserves is in gold; if the country were to bring this proportion in line with the global average of 11%, it would have to buy 6,000 more tonnes of gold, equivalent to more than 2 years of gold production. We believe that these factors – limited gold production, buying by central banks and increasing demand from India and China – can potentially drive the gold price to US$5,000/oz."
Standard Chartered joins the growing list that believes the significant move to Gold/Silver is only a matter of time.

Email: village_whisperer@live.ca
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