Why should investors seek to diversify from stocks and bonds?
*Bloomberg, by Meeyoung Song, October 31, 2006:
"Gold prices may rise by $100 an ounce by the end of this year and
breach the $700 level on renewed interest from investors, Paul Walker,
chief executive officer of London-based research company GFMS Ltd, said.
The precious metal could trade between $580 and $720 an ounce in the
next six months as investors seek to diversify from stocks and bonds,
Walker said at a gold conference today. Gold for immediate delivery
traded at $600.10 at 6:30 p.m. Seoul time.
The price of the metal may reach ``$700-plus'' before the end of the
year, and may even rise in 2007 to the 1980 high of $850 an ounce,
Walker said.
Reasons for gold rising included a weak U.S. dollar, inflation
concerns, global political tensions and more money being invested in
gold, he said.
Gold for immediate delivery reached an all-time high of $850 an ounce
in 1980 on heightened global tension and concern over inflation. It
touched a 26-year high of $730.40 on May 12 this year and has fallen 18
percent since on lower oil prices.
``The real price of gold is still relatively low compared to the
historical high,'' Walker said. ``The weight of money going into gold
in various forms is still there.''
Weak Dollar
A weak U.S. dollar might boost the appeal of gold as an alternative
investment. Gold, sold in dollars, generally moves in the opposite
direction of the U.S. currency. The New York Board of Trade's dollar
index has fallen six percent against a basket of six major currencies
this year."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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