Gold is in an uptrend,’ says Mr. Lesh,
Beaumont, TX (Vocus) December 2, 2009 -–
It comes as no surprise to Jason Whitney, president and CEO of First Fidelity Reserve in Texas, that gold has jumped to a record $1,200.00-plus an ounce in New York. At the same time, according to the December 1, 2009 edition of Bloomberg.com, investor demand for the precious metal has shot up in response to declines in the dollar and higher commodity prices. That too is consistent with Mr. Whitney’s predictions.
As a rare-coin and precious-metals expert, Mr. Whitney has long been preaching the gospel of gold as a hedge against the declining dollar and the unsettled world economic climate. This is not merely a marketing strategy; it’s also a realistic analysis of what is going on in the world today. "Gold will continue to rise as the dollar falls," Mr. Whitney says. "Not long ago, especially after gold fell to $850.00 an ounce in January, some folks scoffed at the prediction that the metal would go past $1,000.00. Now it’s past $1,200.00, and it’s just going to keep on climbing."
A glance at gold’s performance over past year confirms what he is saying. While the U.S. Dollar Index fell after China’s manufacturing grew at the most rapid pace in five years, gold was on a steady upswing, rising for the eleventh time in twelve sessions. U.S. filings show that Morgan Stanley and BlackRock Advisors LLC increased their own gold assets in the third quarter.
Jason Whitney’s perspective is further validated by economic experts who perceive the true power of gold in today’s market. Frank Lesh, a trader at FuturePath Trading LLC in Chicago, says that the dollar has pushed gold to new highs. "Gold is in an uptrend,’ says Mr. Lesh, “and there’s no sign whatsoever that the trend will stop at this point."
The numbers don’t lie. Bloomberg.com reports that gold futures for February delivery rose $12.10, or 1 percent, to $1,194.40 an ounce at 10:47 AM December 1 on the New York Mercantile Exchange’s Comex division, after earlier touching a record $1,200.50. Moreover, gold for immediate delivery climbed to a record high of $1,199.43 an ounce. If that’s not enough to lure the potential investor, gold futures have advanced 35 percent this year, more than the MSCI World Index of shares and U.S. Treasuries. All indicators point to gold heading for its biggest annual gain since 1979.
Gold has had a stunning impact on other nation’s currencies as well, reaching all-time highs against major currencies such as the Euro, Swiss franc, and the pound. Mario Innecco, a broker at MF Global Ltd. in London, says, "People want to get rid of paper and buy a currency that can’t be deflated. That’s gold." Indeed, gold traded in Euros, pounds and Swiss francs rose to all-time highs on Nov. 27. As FuturePath’s Lesh puts it, “Gold is the international currency.”
Gold is also considered a hedge against inflation, which is a very real fear due to low interest rates and a climbing deficit. Michael Pento, chief economist at Delta Global Advisors (and one of those who predicted back in January of 2009 that gold would reach $1,200 by year’s end), said, "It’s hard to make a bearish case for gold right now." As it happens, Jason Whitney has been saying the same thing for a long time.
When you consider that demand for bullion has increased among governments (e.g., India, Mauritius, China, Russia), and that concern over Iran’s nuclear program may also be boosting the appeal of gold, seems clear that there has never been a better time to consider adding the yellow metal to your own portfolio.