Champ,This challenge was issued after the IMF announcement. His...

Champ,

This challenge was issued after the IMF announcement. His 3 reasons for a continued increase in the gold price is as follows:

1. Central Banks, who not too long ago only went one way on gold: sell, have become net buyers of gold. I cant count the number of times just the threat of Central Bank sales or the actual occurrence would tank gold. Its no coincidence that the first lessening of sales through the Washington Agreement and then actual net buying has been one of the key bullish factors.

2. No industry in the whole world did more to cut off its nose to spite its face than the mining industry when it aggressively sold forward its production. Hedging was such en vogue that Barrick Gold (American Barrick back then) became the darling of producers even though by selling most if not all your future production forward was essentially saying you didnt believe (or want) a much higher gold price.

3. Uncle Sam is no longer the worlds favorite uncle and hence his paper is no longer greatly favored. Since it still makes up about 68% of the worlds reserve currency, many key holders of this bulging supply of paper have sought out alternatives.


Cheers

SW