Gold Bull Believes Recent Selloff Won’t Last

Gold is hovering near lows following the worst week for gold prices in four
months. The U.S. fiscal cliff is cited as a major driver of the volatility, but many investors
have exited the market for the holidays and in the anxious anticipation of a more decisive
conclusion to the political debate.

In early trading on Monday, U.S. gold futures for February delivery gained 0.1
percent to $1,661.60 per troy ounce as the spot price gained 0.2 percent to $1,660.97 per
troy ounce as the metals continue to find support after last week’s losses.

Long-time gold bulls, however, are vocal about the long-term drivers of the
market that will continue to be a more prevalent influence on the market in the coming
year. Peter Schiff of Euro Pacific Capital, perpetual bullion bull, told CNBC this past
week that the sell off in gold is only temporary and that investors should be patient
enough to ride this thing out.

He added that gold is one of the few avenues available to investors as a store of
value in a world where major central banks are determined to fight economic weakness
with ultra-accommodative monetary policy.

Schiff asked what investors are going to do. He questioned the wisdom of holding
dollars at zero percent with Federal Reserve Chairman Ben Bernanke promising to print
until infinity. He added there is no currency that you can hold and be confident in its
future purchasing power. But, he said, you can hold gold, you can hold silver.

Schiff is also critical of some of the attitudes on Wall Street. He said people could
make a lot of money in gold and gold stocks if they are patient. However, unfortunately
there’s money on Wall Street that’s not patient. He said he advised other people who
understand the fundamentals to stay put.

Adding to his observations on patience, Schiff said impatient investors are
heading for the exits because they don’t understand the dynamics behind the market.

Schiff has also recent said that there’s a perfect storm coming in the future of the
gold market with miners unable to produce enough of the precious metals because it costs
too much to get it out of the ground. In his analysis, the supply of paper money is going
to go through the roof just at the time the supply of gold and silver is shrinking.

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