Balance of Probabilities Favours Gold at $730 by Year-End

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Furthermore, trend analysis shows that mining equities, as measured by the XAU index, are undervalued, both with respect to gold and, more importantly, with respect to the S+P 500.

That was the conclusion drawn by Dr. Martin Murenbeeld, one of the most respected economists analysing the gold market, in his presentation to the Investing in Americas Summit, the conference run by Global Investment Conferences in Nassau this week.

In a wide-ranging review of the market and the essential parameters that govern it, Dr Murenbeeld presented eight bullish factors driving the gold price at the moment...he looked also at the bearish factors, of which he identified just two...

In his outline Dr Murenbeeld displayed his Gold Monitor Model, which factors in a series of external parameters that have an impact on the price and, running the series back to 1998, calculates that the model pitched gold on Friday 30th March at $640. The fix that Friday afternoon was $661.75 so on that basis, gold is at about the right level and in his words, "there is nothing fluffy about this gold price". Furthermore, trend analysis shows that mining equities, as measured by the XAU index, are undervalued, both with respect to gold and, more importantly, with respect to the S+P 500.

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