Fundamentals of the Gold Market

gold nugget

  • Gold is about to regain its historic status of money. For 2,000 years, money was made from gold and silver coins. Since 1973 and the end of the gold standard, we are living a “monetary experiment” that, as have all experiments of paper money non convertible into gold, has failed.
  • The fall of the dollar from its international reserve status is inevitable.
  • Other international currencies do not offer alternative solutions, because they are all based on the principle of “paper” money, or “debt” money.
  •  The destruction of balanced budgets of governments and the implementation of a zero interest rate policy are likely to lead to a destructive hyperinflationary period.
  •  The true impact of derivatives has not yet materialised.
  •  Demand for gold as investment is accelerating but we’re only at the beginning of the phenomenon.
  •  There is a growing awareness about the fact that numerous financial products for investing in gold do not hold the amount of physical gold they’re saying they have: ETFs, certificates etc. There is likely 100 times more gold sold via certificates than there is physical gold in reality.
  •  Gold mining companies cannot increase their gold production.
  •  Central banks are not selling gold anymore on the markets. While limiting supply, they are now buying all the gold they can in order to lower their exposure to the loss of purchasing power of the currencies.
  •  Central banks in Asia, the Middle East and Russia are accelerating their gold purchases as they witness their dollar reserves losing purchasing power, as the American central bank, the Fed, keeps printing billions of dollars.
  •  Scepticism is growing around the real U.S. gold reserves.
  •  There are very large naked short positions on gold.
  •  The fact that gold has been manipulated for years is being more and more acknowledged.
  •  Gold is still extremely undervalued in relation to the colossal amounts of printed money.
  •  The gold market is a small one.
  •  The growth of the gold market is now established.
  •  Gold has proven for millennia it can play a role of protection against value destruction.