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Thursday, January 17, 2013

Gold Will Climb The Wall of Worry With Or Without The Gold Community

Money, following the ebb and flo of time, has been steadily moving into gold since 2001 despite what seems to many at times as an insurmountable wall of worry (chart 1). The speed and angle of gold's secular up trend, driven by a burgeoning transfer of money from the public to private sector (chart 2 & 3), will only increase in the coming years despite a large number of frustrated investors quitting on gold.  A secular low in bond yields due in 2013 will accelerate this transfer (chart 4).

Chart 1:  Gold, London P.M. Fixed (Gold) and Cycle Z Scores (GOLDC1 & GOLDC2)


Chart 2:  Large Cap Total Return Index (LCSTRI) to Long-Term Government Bonds Total Return Index (LTGBTRI) Ratio and Cycle Z Scores (LCSTRILTGBTRIRC1 & LCSTRILTGBTRIRC2)


Chart 3:  Large Cap Total Return Index (LCSTRI) to Long-Term Government Bonds Total Return Index (LTGBTRI) Ratio and Cycle Z Scores (LCSTRILTGBTRIRC1 & LCSTRILTGBTRIRC2)


Chart 4: High Grade Corporate Bond Yield (Aaa) and Gold London PM Fixed



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