Although gold will close lower on a year-to-year basis for the first time in 12 years, the long-term outlook for gold is still quite positive, according to Michael Fuljenz, President of Universal Coin & Bullion (http://www.UniversalCoin.com) of Beaumont, Texas, who has been tracking the precious metals markets for decades.
"Gold was down in 2013, but it's not out in 2014. China, the world's number one producer and consumer of gold, continues to import gold in near-record quantity; several of Wall Street's most respected fund managers continue to either hold physical gold or are buying gold-related stocks; and the severe U.S. federal budget problems will be back on the front burner by next summer, going into mid-term elections. Those are just a few of the reasons why I'm still a believer in gold as a long-term financial hedge," said Fuljenz.
"China imported more than 100 tons of gold in each of the past six months, and demand for gold in China has tripled over last year's demand. At the same time, paper-gold ETF traders in New York have unloaded about 800 tons of gold this year. The tug-of-war between paper gold investors in New York and physical gold investors around the world continues with rising physical demand to offset the sale of paper gold shares," he noted.
"It’s a lonely position to be a gold bug on Wall Street these days, but the most famous mainstream hedge fund manager in the gold camp, John Paulson, has held on to his 10.23 million shares of the SPDR Gold Trust (GLD), meaning that he is still the largest shareholder in the largest gold exchange traded fund. Meanwhile, George Soros has bought shares in the super-depressed gold mining sector. Last quarter, Soros Fund Management bought 1.1 million shares of the Market Vectors Gold Miners ETF after selling all of its shares in the same ETF during the second quarter."
Fuljenz also points out that many central banks around the world are still net buyers of gold while continuing to print massive amounts of paper currency. He believes those trends are positive for the gold price in future years.
"Many Wall Street analysts have been wrong about gold for a long time. They often predicted lower prices in the 12 years from 2001 to 2012 when gold rose each year. Being correct once in a decade is not a good average for them. I believe gold will have its day again when only a small fraction of the money currently flooding into stocks returns to gold," Fuljenz stated.
Mike Fuljenz has won dozens of prestigious national and regional awards and honors for his consumer education and protection work in rare coins and precious metals. Known as America's Gold Expert®, he is a respected community leader in his hometown of Beaumont, Texas. Mike also has served with distinction as a consultant to the Federal Trade Commission, United States Mint and Royal Canadian Mint, and is on the Board of Directors of the influential Industry Council For Tangible Assets.
His weekly Metals Market Report newsletter is available free online at http://www.UniversalCoin.com.