Speculation of Gold And Silver Shortage Looms, As Managed Funds Continue to raise Their Allocations.
Like the California Gold Rush of the mid-19th century investors from around the world are caught in the grip of the new gold fever. Seeking a safe haven from Dollar weakness, Managed funds and private investors alike are adding the precious metal to their investment portfolio’s in record volume.
A theme is emerging for managed money, which is the growing role of hard assets. Martin Murenbeeld [of DundeeWealth Economics] emphasized that $40 trillion of about $117 trillion worth of financial assets in the world is so-called managed money. In other words, one-third of the worlds assets are controlled by fund managers. Of this $40 trillion, only about $200 billion is in what you would call hard assets such as gold, silver, copper, commodity ETFs, futures. These are the sort of instruments linked to raw materials.
Martin suggests that the trend is going from this relatively small sum to nearly $1.3 trillion. Meaning that approximately 3% of the managed money going into hard assists such as Gold and Silver. Should this happen, there’s not near enough Gold at the current prices.
Gold, like all commodities derive their price based off of supply and demand. If Martin is correct, and many analysts believe he is, Gold spot price could reach as high as $1500 in the very near future. Some Analysis are speculating that we will see gold spot prices reach the $3000 marker by the end of 2010, and my even see $5000 as early as mid 2011.
If you would like more information on the future of Gold spot pricing, and how the hard assets could positively impact your investment portfolio, contact one of our friendly and knowledgeable Gold experts.
Kirk Sandler
Tags: Gold Allocation, Silver Allocation
