Gold “Offers Buying Opportunity” as Monetary Debauchment & Peak Output Make $5000 “Possible” by End-2010

By Adrian Ash, GoldSeek

London Gold Market Report

THE PRICE OF GOLD retreated from its seventh new record high in 11 sessions early Tuesday, dipping 1.3% from Monday’s late top as world stock markets also fell for only the fourth time in November so far.
Crude oil fell and the US Dollar bounced on the forex market after Federal Reserve chairman Ben Bernanke spoke of a “Strong Dollar” in his annual speech to the Economics Club of New York.

Citing 10% unemployment and weak GDP growth, however, he said the Fed “will calibrate the timing and pace of any future tightening [of interest rates from 0%] to best foster maximum employment and price stability.”

Touching $1143.74 an ounce late Monday, gold this morning approached new 9-month highs vs. the Euro and Sterling, and reached its best level against the Japanese Yen since July 2008 at ¥3250 per gram.

“Gold is a more stable store of value, over a five-year view, than all paper currencies except the [Chinese] Renminbi,” says Percival Stanion, head of asset allocation at Baring Asset Management, whose flagship product is the £1.5 billion ($2.5bn) Dynamic Asset Allocation fund.

“Sterling is still our least favored currency, even after significant falls in value,” Stanion is quoted by FT Advisor.

“The multi-asset portfolios at Barings have recently benefited from the surge in gold prices and have now sold out of our exposure to gold mining and switched into gold bullion,” he tells Dow Jones Newswire.

After India said it bought 200 tonnes of gold from the International Monetary Fund last month, the Reserve Bank of Mauritius today said it bought two tonnes from the IMF on Wednesday last week, costing $71.7 million.

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