Untitled Document
Coins & bullion since 1973
 

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pgrant

jonathan

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Discussion Topics -- December 9, 2013
Year End Review
What to Watch for in 2014

(Dec 9, 2013 discussion) Recap: In terms of price, gold has had a tough year. After starting the year at roughly $1700/ounce, the gold price fell through the first six months of the year hitting a low in mid June at $1180 per ounce. Even though gold has stabilized over the last six months, it is all but certain to have its first losing year after twelve consecutive years of gains. And while this has been somewhat difficult to digest for gold owners, many take resolve in the recognition that gold, as a non-correlated asset, has actually done exactly what it is supposed to do. And while mainstream financial media continues to pile on the yellow metal, we at USAGOLD are starting to see the makings of a recovery in the gold market. More and more analysts are stepping forward to announce their skepticism about the sustainability of the current rally in equities. The bond market has started to roll over, but remains in a sort of 'no man's land', where yields are too low to attract long term investment, but appearing to be on the rise, crippling the premium trade. In some areas, housing is reaching the same levels seen toward the end of the housing bubble. Gold, it would seem, is one of the only remaining asset classes to appear 'undervalued'. There is a general consensus that all markets have been greatly distorted by the Quantitative Easing policies of the Federal Reserve. Yet that said, gold has lost just about all of its QE premium. The same cannot be said for equities or bonds, further highlighting the attractive relative value of gold at this time. From a fundamental point of view, both gold and silver demand saw records this year. China will ultimately import close to 2000 tonnes of gold this year, which amounts to the entirety of global gold output. Taxes and tariffs have done little to abate Indian demand. Meanwhile, in the United States, 10 times as many silver Eagles were purchased by American investors as gold Eagles - a record. With such a strong fundamental underpinning, it seems the only thing holding the gold price back is technical weakness, and the absence of speculative money. That could change in an instant, and as gold appears to be finding a bottom, may not be too far off. 34:28 Minutes, with Jonathan Kosares, Peter Grant and George Cooper.

Figure 1

Gold Chart 2013

Figure 2

china imports of gold

Figure 3

gold graph dec 2013

Figure 4

Silver Gold Ratio 2002

Figure 5

Russell Graph

Figure 6

Federal Reserve Bank Total Assets

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