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Still Bullish After 20 Years – The UK’s Top Gold Fund Manager
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Posted by ian 1 year 222 days ago (contrarianprofits.com). Views: 25
Tags: gold economics |
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Twenty years on and 2,603% up from its start date; Blackrock ML Gold and General Fund has every reason to celebrate. Nor is there any sight of an end to good times for gold and hopefully the fund yet. According to the London fund manager, Graham Birch, the fundamentals are just “too compelling”.
Gold at around $920 is not expensive compared to the price 20 years ago. Doing some inflation adjusting even the previous high of US$850 in 1980 would be worth $2,279 today.
Top of those fundamentals he lists, is that there is less and less being produced. Gold production peaked in 2001. It was down by 3% in 2006, by 1% last year.
Analysis by top gold producer Barrick Gold indicates that “mine supply will fall by 10-15% over the next five years as there is a lack of new production coming on line.”
Nor is there is as much gold coming into markets from the world’s central banks. They did not meet their self-imposed sales quotas in 2006 or 2007. Russia has a target for gold of 10% of its reserves and yet at the moment the level is only at 2.5%. Qatar has been buying. Middle Eastern and Asian central banks are looking at gold as a way of getting out of the dollar.
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