Four Reasons Gold Will Stay Firm and Strengthen-Blanchard

Source:

"Continuing low rates and currency risk. . .should lead to gold remaining firm in all currencies."

In a release put out by Blanchard yesterday, Chairman and CEO, Donald Doyle, points out four signs that the gold price is going to improve:

"Central bank demand for gold is likely to continue to grow, with Russia and Venezuela adding to their reserves."

The second sign is that interest rates in the largest global markets remain near zero. Which he says makes "ownership of non-yielding gold favorable and prudent, as it is a currency that cannot be debased by governments or central banks.

"Continuing low rates and currency risk that is prevalent in the market should lead to gold remaining firm in all currencies," he adds.

The third factor he mentions is that China continues to explore severing its links with the U.S. dollar. This he says should make the yuan appreciate in the medium- and long-term.

"With China's vast dollar holdings, there should be continuing investment and central bank diversification into gold," he adds.

The final point Doyle makes is about Europe, "There are legitimate concerns with the European monetary union, and the outlook for sovereign debt markets internationally is uncertain," he says.

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