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David Rosenberg: Now Is the Time to Buy Gold

Wednesday, 04 Aug 2010 08:33 AM

Gluskin Sheff chief economist and analyst David Rosenberg says now's the time to buy gold.

“There is no question that gold’s allure as a safe-haven has taken a bit of a beating with the more confident tone coming out of European markets, but be assured that in a global postbubble credit collapse, skeletons come out of the closet when you least expect it,” Rosenberg writes in a note to investors.

"The investment demand for gold remains quite solid at a time when production growth is still anaemic.”

The World Gold Council, Rosenberg points out, just released data showing that investors bought 273.8 metric tons of gold via ETFs in the second quarter, the second highest tally on record, bringing net investment in these finds to more than 2,000 tons valued at about $82 billion.

“The surprises are not over; not by a long shot,” Rosenberg says. “And the gold price will ebb and flow, but it is in a secular bull market and will retain its natural hedge against recurring concerns surrounding the integrity of the global financial system.”

Gold has benefited from the commodity bull market, demand growth, lack of production (supply), and the flight to safety relative to fiat currencies, says Mike Halloran, vice president of market strategy at BPU Investment Management.

“Gold would also continue to benefit as a flight to safety in the event of further economic turmoil and concern over fiat currencies,” Halloran tells Newsmax.

“In addition, while commodity bull markets typically last 10 years, there are many studies that show gold is undervalued in real terms relative to other asset classes.”

Spot gold was at $1,185.35 late in New York on Tuesday.

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Gluskin Sheff chief economist and analyst David Rosenberg says now's the time to buy gold. There is no question that gold s allure as a safe-haven has taken a bit of a beating with the more confident tone coming out of European markets, but be assured that in a global...
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