Tags: gold | unlimited | demand

JP Morgan: Gold May Face 'Unlimited' Demand

Monday, 24 May 2010 03:11 PM

Investor appetite for gold appears to be booming as prices have crept upward, says John Bridges, a JP Morgan analyst.

The precious metal could yield a large demand as fears of the euro and the dollar weakening continue, Bridges said in the report, according to the Business Insider.

Gold recently traded at $1195.50.

“A German banker once told us that gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited," Bridges said in the report.

Gold prices will keep its upward climb, said Spencer Patton, chief investment officer of the Chicago-based hedge fund Steel Vine Investments, Dow Jones reported.

“Will we be higher at some point in the year? I think it is very reasonable to say we may be,” he said.

Gold may generate higher prices “in the longer term," said Mark Johnson, portfolio manager of the USAA Precious Metals and Minerals Fund (USAGX) in San Antonio.

In the near term, the precious metal could face a natural retreat, he said.

Meanwhile, billionaire commodities magnate and Tigris Financial Group head Thomas Kaplan reportedly has gone all in on gold. "I've reached a point where I feel the only asset I have confidence in is gold," Kaplan says.

Reflecting his conviction that global economic instability could bring rising demand for gold, Kaplan has gone further than perhaps any other major investor, betting the majority of his wealth on gold and other precious metals.

"You've got a perfect storm with no apparent solution," he told The Wall Street Journal.

"If the world does well, gold will be fine. If the world doesn't do well, gold will also do fine … but a lot of other things could collapse."

Though he won't disclose how much physical gold he owns, Kaplan, controls up to 30 percent of the shares in some so-called junior miners. Together, his holdings amount to a nearly $2 billion bet on gold, more than the Brazilian central bank's bullion is currently worth.

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Investor appetite for gold appears to be booming as prices have crept upward, says John Bridges, a JP Morgan analyst. The precious metal could yield a large demand as fears of the euro and the dollar weakening continue, Bridges said in the report, according to the Business...
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2010-11-24
Monday, 24 May 2010 03:11 PM
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