Tarnished Only on the Outside, Gold Will Regain Ground in the Year Ahead
Source: Mineweb (9/16/08)
In a "Commodity Comment" released the Monday that Wall Street experienced its worst day in seven years, BMO Capital Markets suggested "that the gold market may be oversold, but it is not clear if a rally is imminent given the current financial and foreign exchange environment."
BMO Global Commodity Strategist Bart Melek summed it up succinctly: "Things are not ‘adding up', i.e. markets are not behaving in a consistent manner."
Despite the turmoil, Melek advised that gold will regain its ground into 2009.
"Negative interest rates and systemic risks in the financial sector, the credit crunch are all making many fixed income assets, equities, and real estate a risky proposition," he said. "As such, investors could well start building their gold positions again given other asset classes have lots of risk associated with them and only limited upside."