Sep 17, 2003
Summary of Craig Smith Q & A with June Grasso (The Bloomberg Money Show) about why he believes that the gold and coins markets are in a new bull market which airs on 9/18/03, 5:30-6pm PT on Bloomberg Radio.
JUNE: Some economists are calling for $400 gold by the end of '04 -- an 8-year high ... Is that in line with your expectations?
CRS: Yes, Gold up is 32.8% since 9/11/01 ... I see $500 gold by the end of next summer...As I cover in my latest article. The "Fundamental: reasons include; overvalued equity markets, weak U.S. dollar, slow economic recovery, rising interest rates on the horizon, emerging debt crisis (we borrow $.11 of every dollar we spend now) stagflation/inflation risks. The "Techincal" reasons include; supply/demand squeeze, gold bull cycles typically last 3-5 years(we are in 2nd year), charts show healthy growth since '01. When gold broke out of down trend Dec. '02 marked the first time since 79-80 that gold rose above prior peak.
JUNE: Do you think the new proposed Exchange Traded Fund will expand the public interest in holding gold? WHY?
CRS: Yes, World Gold Council's proposed EFT fund will be backed 100% with gold. If SEC give the OK, this will allow investors to hold gold without physical delivery. Any Smith of Mitsui says, "This is the mother of all bullion products." This is also covered in my latest newsletter.
JUNE: Where do people store gold?
CRS: Many use safe deposit box, floor safe or a private place on your property. Physically held gold offers total privacy, and liquidity.
JUNE: What percentage to you recommend investors start off with in gold for diversification?
CRS: I could be as little as 5% to as much as 15% depending upon your goals, age and a variety of individual factors. Dr. Lombra's study for Congress proved that gold coins add both to safety and overall return.
JUNE: What is your website again?
CRS: swissamerica.com to read my latest newsletter,THE NEW GOLD RUSH Part II, The Color of Hope.
JUNE: Thanks Craig, as always it is a pleasure.
CRS: You're welcome. Talk to you again soon.
[Editor's Note: RELATED STORY]
Gold May Rise Near 8-Year High by End of 2003 - Bloomberg
Sept. 17 (Bloomberg) -- Gold prices may reach $400 an ounce by the end of 2003, the highest in almost eight years, because of higher demand from investors seeking a haven, a London-based consultant said.
Demand from investors in North America and Europe jumped an estimated 55 percent in the first half from a year earlier, to 140 metric tons, Gold Fields Mineral Services Ltd. said in a report.
``There's a definite, if still modest, pick up in longer term interest from people seeking a hedge against current insecurities,'' Philip Klapwijk, Gold Fields managing director, said in a faxed statement. ``Stocks are looking shaky, the dollar's probably heading south and the political situation doesn't seem to show much signs of calming down.''
Gold climbed 25 percent last year, its biggest gain since 1979. A gold fund, the Merrill Lynch Gold & General Fund, was the U.K.'s top-performing unit trust. Two U.S.-led wars since the Sept. 11, 2001, terrorist attacks in New York and Washington may have spurred interest in the metal.
The weakening of the U.S. dollar also has made dollar- denominated gold cheaper for holders of other currencies. The euro gained 18 percent against the dollar last year while the British pound climbed 11 percent.