Tuesday, March 11, 2014

Asia problems to lead Gold higher

Why Gold could go higher
We have an economic slowdown in emerging economies that is very pronounced.

I think some emerging economies may be submerging soon, and have significant economic problems. The question arises, “Will they continue to buy gold?” 

Say if there was a recession in China — a downturn — would people buy gold?

I think if the Chinese economy imploded, it is likely that the currency, the Yuan, would begin to weaken. Or the government would devalue the Yuan.
If that were the case, then I think that Chinese investors would shift some of their money into gold rather than keep their funds in the local currency.

So I think that a problem in Asia — and geopolitical problems in Asia and in other regions of the world — may lead to higher rather than lower gold demand.