BMO’s Coxe Advocates Overweighted Positions In Gold, Base Metals

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According to Mineweb, he (G.M. Coxe)proposed that “gold’s true value these days is not as an inflation hedge, but as a protection against serious problems for the dollar and/or the financial system.”

In spite of a slowing U.S. economy, a housing slowdown, strong oil prices, soaring precious metals prices, and tightening by all major central banks, BMO’s Global Portfolio Strategist Donald G.M. Coxe noted financial markets performed splendidly in 2006.

In his latest investment article, Coxe recommended that investors continue to maintain an overweighted position in gold whether through mining company stocks or the ETF.

Coxe suggested that “the serial debauching of corporate bonds and the dissemination of junk derivatives through the financial system means that, if a true global slowdown comes, system risk will return.” Therefore, he proposed that “gold’s true value these days is not as an inflation hedge, but as a protection against serious problems for the dollar and/or the financial system.”

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