Tags: Ed Moy | gold | prices | supply

Strategist Ed Moy: Gold Prices May Soon Rise Again

By Dan Weil   |   Wednesday, 13 Nov 2013 08:20 AM

Gold prices fell to a one-month low Tuesday, but factors are in place that could send the precious metal's value back up, says Ed Moy, chief strategist at Morgan Gold and former director of the U.S. Mint.

Comex December gold futures settled at $1,271.20 Tuesday.

Investors in the United States and Europe have abandoned gold in favor of stocks, as inflation has remained low and the Federal Reserve's quantitative easing (QE) has boosted equities, Moy tells Yahoo.

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"That gold has been bought by record demand in Asia," including China and India, he explains.

"The demand for gold bars and gold coins is at its highest in history. That gets covered up by the fact that gold prices are down now."

Asians keep the gold they buy. "They pass it down from family member to family member," notes Moy, a Moneynews contributor.

"So with all that gold off the market in Asia, and with the gold prices as low as they are, there's going to be a supply crunch should there be increased demand in the West for gold."

Once the Fed exits QE, gold should move in tandem with the level of U.S. debt, which could mean such a demand increase will occur, Moy says.

Talk that the Fed may taper its QE as soon as next month is hurting gold.

"The market seems concerned that the tapering of QE may start sooner than later and that seems to be weighing on sentiment," William Adams, an analyst at Fastmarkets.com, writes in a report obtained by Bloomberg.

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