Gold may have dropped 11 percent from its August high above $1,900 an ounce, but that hasn’t dimmed the bullishness of investment luminaries Byron Wien and James Grant.
Monetary easing by central banks across the globe will continue to buoy the precious metal, they say.
Wien, vice chairman of Blackstone Advisory Partners, made gold a part of his asset allocation strategy this year for the first time ever and now recommends a 5 percent holding in gold.
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“The money supply will be expanded in the major currencies in the developed world, and investors will seek the protection of hard assets: something real, and gold is perceived as real,” he tells The New York Times.
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As for Grant, publisher of Grant’s Interest Rate Observer, he tells The Times that central banks have shifted from central banking to central planning.
That means “they are devoted to raising up, if they can, economic growth and employment through the dubious means of suppressing interest rates and printing money,” Grant says.
“The nice thing about gold is that you can’t print it.”
One factor that could boost the metal in coming weeks is renewed concern about the U.S. budget deficit in the wake of the congressional supercommittee’s failure to agree on ideas for cutting it.
“The uncertainty around the budget-deficit talks is positive for gold in the long run,” Sterling Smith, an analyst at Country Hedging, tells Bloomberg.
“We have seen an increase in physical interest.”
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