1. We are now waiting for Barclay to start up their ETF in NY and that ought to remove gold from the market, assuming their systems are clear.
2. The increased interest in Gold in China and more so in India: there are large numbers of people who are doing well and decide to invest more in Gold.
3. The US and worldwide deficits which are getting worse. Little has been done to reduce these.
4. The USD which is waiting for its next shock treatment.
5. Oil supply and security. There can't be a guarantee.
6. The political situation in the Middle East. There is a fear that Iraq may finish up being cut up.
7. The US army is having a hard time in Iraq. Plenty of people getting killed and this results in anti US hatred. Reports indicate a massive expenditure to come of some $200 Bill. for Iraq and Afghanistan in 2005.
8. The constant fear of massive sabotage by terrorists.
9. The not so good US international standing in Europe and the Middle East. This results in boycott of American goods and the phasing out the dollar, wherever possible.
10. The evidence that US inflation and interest rates are moving up.
Gold prices don't move in a straight line, so there will be retracements from time to time. Sofar, these have been minor considering the massive selling and shorting of gold by Hedge funds not too long ago and the current tax loss selling.
To bring the gold price down in a meaning full way requires a great effort as mentioned before.
At the same time, these constant positive and powerful gold price drivers may quickly restore gold to a good setting after any retracement.
Gerry
NCM Price at posting:
0.0¢ Sentiment: None Disclosure: Held
