Physical gold to trump ETFs by 500% in 2011 hears Dubai conference
Posted on 13 November 2011t
Posted on 13 November 2011t
Physical gold will outsell ETFs by 500 per cent this year, Standard Bank’s Walter de Wet told the 8th Dubai City of Gold Conference today. Two years ago the position was completely reversed with physical gold sales running at only 20 per cent of ETFs.
‘It’s a complete flip from ETFs to physical gold,’ he said. ‘And it seems to reflect people’s lack of trust in financial systems and the shift in investment flows towards Asia and the Middle East.’
$2,200 gold
Standard Bank is expecting the price of gold to hit $2,200 at the end of the first quarter next year and $2,000 in Q4 2011. Dr de Wet made the theme of his presentation ‘Gold as a currency’ and forecast both a QE3 in the US and that ‘the ECB will have to do exactly the same.’
He noted that ‘gold prices will continue to rise so long as we have macro imbalances with rising debts balanced by rising reserves in other countries’. So when will it all be over for gold?
‘Only when first the Fed stops expanding its balance sheet which we do not expect for three to four years, and governments stop borrowing and China stops accumulating foreign reserves.’
Standard Bank reckons $500 billion of QE3 will add $200 to the gold price early next year, taking it to $2,200. Silver barely got a mention, although ArabianMoney is confident it will deliver even higher returns (click here)...........
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