The future of gold

Key trends and flows to the East

With central banks and investors around the world looking to buy gold bullion, gold is becoming an investment asset class you cannot ignore.

The newly emerged nations buy gold in huge size as their economies grow and their wealth increases. Meanwhile citizens in the Western world also have a deep interest in their national gold reserves, and are increasingly looking to gold investment in response to financial crises close to home.

With the global recovery limited at best and confidence in markets and policy responses low, gold looks to play an increasingly import role in future world affairs. It is for this reason that analysts see the gold investment bull market continuing, with powerful efforts to secure gold mine supply being made. China’s acquisitions of gold mines around the world are staggering and continue apace, against a back drop of insecure mine supplies and decreasing ore grades.

Voices in high places are calling for gold to be used as part of a future money system, whether from presidents of the World Bank, Governors of the Peoples’ Bank Of China or US Congressmen, gold appears to be returning to the heart of the financial system. Did you know that some US states are returning to the money of their founders and already using, or moving towards, gold money once again?

Given that confidence in our heavily printed national currencies is under pressure, the banking system still struggling under record debt levels, gold is increasingly mentioned as a solution to the problem. With global policy responses from governments and central banks failing to bring improvement and growth, the future for gold looks bright as savers and investors buy gold for diversification and security during good and bad times. Given that gold investments only representing one to two per cent of global financial assets, there is plenty of opportunity for future diversification.

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