Profit Confidential Says Three Major Indicators Show Gold Prices to Head Astronomically Higher
Profit Confidential is weighing in on current gold prices and how three major indicators show gold prices will move significantly higher.
New York, NY, United States – July 10, 2015 /MarketersMedia/ —
Profit Confidential (www.ProfitConfidential.com) an e-letter of Lombardi Publishing Corporation, a 29-year-old consumer publisher that has served over one million customers in 141 countries, reacts to current gold prices and says three major indicators show gold prices are poised to head significantly higher.
“Over the last 30 years, the biggest profit plays centered on getting out of the markets when everyone wanted in, like the NASDAQ tech boom of 1999 and now. And getting into investments when few wanted it, like gold in 2001 and stocks in 2009,” says economist and lead contributor Michael Lombardi. “Today, depressed gold bullion prices are offering investors that once-in-a-lifetime ‘buy low’ opportunity.”
Lombardi explains that there are three very clear reasons why gold prices will move higher from their current depressed levels. Over the last number of years, world central banks have been significantly increasing their gold holdings. Since 2009, central banks have been net buyers of gold. In the first quarter of 2015, central banks bought 119.4 tons of gold. It also represented the 17th consecutive quarter where central banks were net buyers of gold. (Source: Gold.org, data set, “Gold Demand Trends, Q1, 2015,” May 14, 2015; http://www.gold.org/supply-and-demand/gold-demand-trends)
Gold demand from China, the world’s biggest gold producer, and India, the biggest gold consumer, remains strong. In the first quarter of 2015, India consumed 191.7 tons of gold, up 15% from the same period a year ago. In China, demand for gold declined slightly to 272.9 tons. Recently, a well-known Chinese news source, Xinhua, reported that an investment fund has been set up by the Shanghai Gold Exchange. The fund is expected to raise $16.0 billion and will be investing in gold mining projects in an economic region called the “Silk Road,” which includes 65 countries. At the very core, this shows how much China favors the precious metal. (Source: Xinhua.com, article, “China sets up largest gold fund,” May 23, 2015; http://news.xinhuanet.com/english/2015-05/23/c_134264324.htm)
“Finally, the decline in gold prices that began in 2011 has constrained production. This is basic economics; when prices are low, producers don’t have much incentive to produce. They shut down mines where production is not profitable,” Lombardi adds. “Major gold-producing countries are reporting a significant decline in their gold production. South Africa, the United States, Australia, and Canada are all producing less gold than they used to.”
“Gold continues to be ignored in an environment where demand is strong and supply is contracting. Even amateur economists say this is the perfect recipe for higher gold prices,” Lombardi concludes. “Unfortunately, investors who so often follow herd mentality aren’t looking at it this way. I continue to see the share prices of major gold mining companies as ridiculously cheap.”
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.lombardipublishing.com.
For more information about us, please visit http://www.profitconfidential.com/
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