gold investing

A gold-industry CEO and industry analyst recently sat down with a reporter from TheStreet.com to discuss the future price of gold. He forecasts that the spot price of gold will climb to $5000 per ounce. See the interview below:

Marvin Clark is the author of an article published on September 17, 2010, titled, "The Baby Boomer's Case for Gold." Mr. Clark is the Managing Principal and Chief Economist and Strategist for Monsoon Wealth Management.

Regarding financial professionals' position on gold as a part of your overall portfolio, Mr. Clark points out:

"Each passing day takes us farther from a 20th century of calibrated knowable unknowns into a 21st century of mounting unknowable unknowns which historically leads to ad hoc mischief and turmoil. The appropriate characteristics of gold bullion and precious metals are an imbued antidote to today's financial crisis and the correct mid-term solution for alternative investments. Yet, gold is constantly ridiculed as a "gold bug" vehicle in the mainstream media."

The article continues: "Every financial crisis produces real gold bugs. Eventually, the inflationary 1970s created more gold bugs faster than Ben Bernanke can print dollars. In time, this will happen again. However, the price level for gold is unremarkable, given the sheer size of the aggregate global money supply of tens of trillions of dollars, even more in outstanding debt, and ubiquitous domestic and global political uncertainty."

Mr. Clark continues on to discuss the specific considerations pertaining to the next 20 years for Baby Boomers:

A report just released by the World Gold Council paints an interesting picture for the future of gold prices, driven by a surge in demand in China.

The Council reports that China is quickly catching up to India on the list of the world's largest sources of demand for gold. According to the report, demand for gold during the second quarter of 2010 in mainland China was 111.7 tons, an increase of about 25% from the second quarter of 2011.

Demand in India was higher, at 164.5 tons, but flat from a year prior. The demand in China is being driven by individual retail buyers, which raised net retail investment in China (36.3 tons) above retail demand in the U.S. (30.3 tons) during the second quarter of 2010.

Meanwhile, the Chinese government has been increasing regulation on the country's stock market, raising fears of domestic inflation. When this happens, investors in China, as in other countries, look to gold as a way to protect their assets and preserve their wealth.

When demand for gold goes up in one country, it generally has a spillover effect to other countries, which ultimately tends to increase the price of gold bullion.

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