News

October 07, 2008

Gold – Safe Haven Or Bull Trap

By Michael Coulson

I am genuinely proud of the fact that when I was Chairman of the Association of Mining Analysts we held two gold seminars at which the much reviled Gold Anti Trust Action Committee (GATA) spoke. What they said about the gold market and the shadowy world of derivatives has come home to roost, and with an accuracy that I cannot recall the like of in over 35 years as a stockbroker and mining analyst. Contrast their early decade comments with those of London gold guru Andy Smith who forecast at the first AMA seminar that, after a short term run, gold would fall to $65/oz. For that forecast to come true now would require the world to suffer the worst deflation since the cavemen ran out of sharp stones eons ago!

In Wednesday’s FT, where the wish is always father to the thought, the mighty Lex once more laid into gold. Of course his desire to see gold crash (or perhaps just fall back) will someday possibly be realised. However it is clear that statements that jewellery demand is plummeting show Lex has no understanding of the gold market. Unfortunately I can’t send him any of my past annual Gold Books, as I am down to my last copy. If Lex had read them he would note that when the gold price goes up...