Metals firm GFMS is adding their weight to warnings of an upcoming significant drop in the price of gold. (Counted by many calls for an upcoming spike of course)
There main reason seems to be that they expect waning investment demand for the metal, thus reduced investment flows:
“We’re certainly in the end-game now, although that could still take a year or more to play out,” GFMS chairman Philip Klapwijk said in a statement to market the release of its Gold Survey 2010.
“But after that, it’s difficult to see how we can avoid a hefty drop in prices if we want to boost jewellery and trim scrap to bring the overall market back into equilibrium,” he said.
“We’ve actually raised our short-term downside for the price as we can’t see a good reason for investors to dump gold, and the fundamentals, if still pretty weak, are improving,”
Still, they are careful to add that ‘downside is capped’ by continued global concerns towards currencies.
Their rather hedged view stands in sharp contrast to that of Marc Faber most recently.
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