Monday, November 07, 2005


Money Managers See 'Bull Market For Gold'

Bloomberg has the surprising results of a Wall Street poll. "Gold prices, up 4.4 percent so far this year, may rise on speculation the Federal Reserve will fail to slow inflation, boosting the appeal of bullion as a hedge, a Bloomberg survey shows."

"Seventeen of 28 traders, investors and analysts surveyed from Sydney to Chicago Nov. 3 and Nov. 4 advised buying gold this week. Eight recommended selling the metal and three were neutral."

"'The Fed is committed to gradualism and inflation is likely to rise faster than interest rates,' said Stephen Leeb, who oversees $140 million in New York. Leeb Capital holds 4 percent of its assets in gold stocks. 'It's a bull market for gold,' he said."

"The precious metal is heading for a fifth consecutive year of gains and is a better gauge of future inflation than crude oil or the consumer-price index, Boston-based H. C. Wainwright & Co. said in a Nov. 4 research reported commissioned by the World Gold Council."

"U.S. consumer prices in September rose the most since 1980 as a surge in crude-oil and gasoline prices filtered through the economy, the Labor Department said Oct. 14. Prices paid by consumers jumped 1.2 percent, the biggest increase since March 1980."

"'The Fed is behind the inflation curve,' said Thomas Winmill, who invests in gold stocks for the $60 million Midas Fund in New York. Ben Bernanke, nominated by U.S. President George W. Bush to succeed Fed Chairman Alan Greenspan, is 'going to be stimulating the economy and let the inflation creep higher,' which will be positive for gold, he said."

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