March 11, 2010 – Many analysts and experts see the outlook for certified gold as very positive in the days ahead. The current ten-year bull run has shown no signs of ending and as Frank Holmes, CEO and CIO of U.S. Global Investors says, “there are many compelling factors both from a supply side and then from the demand side that looks like gold will trade higher,” Holmes remains bullish on gold investment for a number of factors, including economic concerns, rising Asian incomes and diminishing supplies worldwide.

The continued economic problems in a number of countries make rising prices for certified gold seem quite possible. England is struggling with rising inflation, now reaching 3.7 percent. Greece, Spain, Ireland and Portugal are all facing problems with sovereign debt. The United States is facing devastating jobs losses with unadjusted unemployment figures being close to 18 percent, a debt to GDP of nearly 100 percent, and the threat of inflation as the US Future Inflation Gauge has shown for nearly a year that devaluation could occur.

While national economies have struggled, the Asian market is becoming a greater potential source for certified gold due to rising incomes. India now has a per capita income of $1,032 and China stands at over $3,000. These two countries are already the largest consumers of gold, including the investment, jewelry and industrial markets. Holmes notes that China is also the largest producer of gold, but doesn’t affect over prices because they are “using it as a reserve currency for themselves.”

Finally Holmes notes that production of certified gold is not meeting worldwide demand. Production in 2008 fell by 10 percent. In addition, the cost of production continues to rise, making gold more expensive to locate and bring to the market.

Holmes is not the only expert with this view of certified gold. Jeffery Nicholls, managing director of American Precious Metals Advisors says, “We remain firm in our conviction that gold prices will touch or surpass $1,500 in 2010 and continue to move higher in subsequent years.”

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Stewart Lawson

Senior Staff Writer - Certified Gold Exchange