This Month in Gold – July 2012

Gold Investment Demand in China to Advance 10%
Bloomberg – China’s largest bullion bank expects domestic investment demand to increase by 10% this year. Zheng Zhiguang, general manager of the precious metals department at the Industrial and Commercial Bank of China Ltd. (ICBC), said currency debasement and the European debt crisis are driving safe-haven demand among local investors. “It’s necessary,” Zheng noted, “for individual, institutional, or even government investors to hold gold when the value of money is decreasing at a time of possible quantitative easing or excessive money-printing practices.”
Read full article>> 
 
Central Banks Buying Gold Like It’s 1965
Barron’s – The last time the world witnessed the official sector buying bullion as consistently and substantially as it is now was… 1965. The 2008 financial crisis and the US Federal Reserve’s response to it, namely money printing, proved to be the turning point for sovereign bean counters. Central banks worldwide increased their gold holdings by 400 metric tons in the 12 months through March 31, up from 156 tons during the prior year. Emerging market central banks, in particular, have spearheaded the return to non-fiat reserves. This trend is driving speculators out of the gold market. Now, “the best way to play gold is as a long-term investor as a hedge against loss of purchasing power of paper money,” says George Gero, strategist at RBC Capital Markets in New York.
Read Full Article>>   
 
Never Mind Europe, US Is the Bigger Threat
CNBC – Goldman Sachs economist Jim O’Neill thinks the weak employment picture in the US is a bigger threat to markets than the protracted European debt crisis. For O’Neill, stalled hiring reflects the underlying fragility of the American economy. With the May job creation report coming in at just 69,000 and the unemployment rate ticking up to 8.2%, “…some of the momentum in the US has been lost.” Were it not for a lack of confidence overall, O’Neill suggests that the European crisis would be having less of an impact on US markets.
Read Full Article>>  
 
Endless QE? Yes.
Reuters – A Reuters analysis finds a robust majority of investment professionals see central bank pump priming coming by October. The expectation is that all of the Big Four global central banks – the US Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England – will continue to shift into inflation mode. “It is almost as if investors are saying QE will happen no matter what,” said Bank of America Merrill Lynch’s Gary Baker. The analysts note that political pressure is overwhelming to keep the spigots turned on. “The heyday of independent central banking could be drawing to a close,” notes HSBC economists Karen Ward and Simon Wells. Scary times indeed.
Read Full Article>>  
 
Inflation Camp About to Win the Argument
MarketWatch – “The next decade will see a global consensus for inflation. If you want it, you’ll get it, central banks just have to print enough money,” argued Matthew Lynn, columnist for MarketWatch. Lynn notes that very soon Europe and Japan will resolutely join the US and the UK in the inflation camp to mitigate sky-high debt burdens, further increasing the global appeal of the inflation fix. How to survive this market environment? Invest in gold, property, and blue-chip equities, says Lynn – and stay away from bonds.
Read Full Article>>   

Get Peter Schiff’s latest gold market analysis – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning more about physical gold and silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!