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Credit Suisse Gold Bars - 5 Reasons The Bank Says Buy
Firstly Dr David Davis, one of the banks' gold analysts believes the cost of producing gold will be $1400 by 2015. Naturally the cost of sale is going to have to be higher. Secondly When adjusted for inflation, the price of gold is still 34% less than its all-time peak. The late 70's peak of $850 is equivalent to approximately $1800 at today's prices. In other words even though the price of gold seems amazingly high already, it is not as high as it has been in real-terms. There is still plenty of room for gold to continue soaring upwards. Thirdly Moving forward, the bank sees five maco-economic scenarios panning out. In simple terms these are, more quantitive easing, renewed deflation but with no quantitive easing, sovereign debt crisis, normal recovery and recovery combined with loose monetary policy. On balance, the bank is of the opinion that the final outcome is 80% likely to support gold prices. Fourthly Countries like Japan and China hold a low percentage of their foreign exchange reserves in gold (2.5% and 1.6% respectively). Scares in the currency markets may force these countries to re-think this strategy. Even a small increase in the proportion of gold they choose to hold in their reserves would have an impact on the demand for bullion. Finally Due to the financial crisis, interest rates have come crashing down around the world. One of those rates is the Federal Fund rate, which is the rate at which banks lend to each other. Currently it is under 2% and the Bank reckons it is going to stay that way for the next 3 years. Not only is that good for borrowers but also for gold which tends to perform well when this rate is under 2%. In summary, all of the above points are good for gold prices. Even though prices look high, higher prices are coming and big profits can be made. Article Directory: http://www.articledashboard.com Do you want to profit from the massive increase in gold that is yet to come?
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