Marcus Grubb-Managing Director of Investment at World Gold Council (WGC) stated that gold as an asset class would witness a renaissance in 2014.In his view, ETFs are not always a clear indication of the sentiment and that gold will deliver positive upside surprise in prices next year.
Comex gold inventories have plunged more than 36% year to date, creating a market more leveraged than it has been for the last nine years. Inventories are down from 11.059 million ounces to 7.034 million ounces today.
Gold is now at its lowest level in three years. Somewhat positive U.S. economic data has again lifted stock markets and speculation that the Fed may decrease its QE over the next few months may be pressuring gold. However, these factors do not justify the scale of gold’s fall.
Central bank demand is set to continue as macroeconomic, geopolitical and monetary uncertainty is here to stay and indeed may escalate substantially in the coming months as we move into the next phase of the global debt crisis.
Since the middle of April we have all heard the gold bear cry of ‘it’s over, gold is done with…the bubble has burst.’ But not many of these so-called expert commentators have really looked into the strength of demand in the East.
Gold looks set to have a third week of higher closes and is heading for the longest run of weekly advances since March. Gold is up 1.6% in U.S. dollars and 2.3% in Australian dollars due to concerns about the outlook for both the U.S. and Australian economies.