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Credit Suisse Gold Bars - 5 Reasons The Bank Says Buy
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Posted On :
Aug-18-2010
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Article Word Count :
416
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In a June 2010 report released by Credit Suisse Bank of Switzerland, 8 reasons are presented that support a continuation of gold’s upward price trend in the year’s ahead. Three of the reasons are rather technical but the other five are tangible and give a good perspective on the current economic outlook and the role gold will play. This article summarises those 5 reasons.
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In a June 2010 report released by Credit Suisse Bank of Switzerland, 8 reasons are presented that support a continuation of gold’s upward price trend in the year’s ahead. Three of the reasons are rather technical but the other five are tangible and give a good perspective on the current economic outlook and the role gold will play. This article summarises those 5 reasons. So if you are looking to get invested in top quality gold bullion such as Credit Suisse gold bars, read on.
Firstly
Dr David Davis, a senior gold analyst at the bank believes the cost of producing gold will be $1400 by 2015. This indicates that most likely, the cost of sale is going to have to be higher.
Secondly
Adjusted for inflation, the gold price is still 34% less than its all-time peak of $850 during the late 70's. In other words even though the price of gold recently hit $1200, in real-terms it is not as high as its previous peak. So there is still plenty of room left for this bull-run.
Thirdly
The current economic climate has yet to play out in one of or possibly a combination of five scenarios. These are basically, more quantitive easing, renewed deflation but with no quantitive easing, normal recovery, recovery combined with loose monetary policy and sovereign debt crisis. Of these scenarios, it is the bank's belief that the ultimate outcome is 80% likely to support gold prices.
Fourthly
Foreign exchange reserves held by Japan and China are made up of a low proportion of gold (2.5% and 1.16% respectively). In the event that these countries choose to increase their gold holdings by transferring forex into gold bullion, it would lead to massive demand for gold 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%.
So there you have it. A quick view of why one of the biggest banks in the world believe the price of gold should be supported and see higher prices in the next few years.
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Article Source :
http://www.articleseen.com/Article_Credit Suisse Gold Bars - 5 Reasons The Bank Says Buy_29169.aspx
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Author Resource :
Do you want to profit from the massive increase in gold that is yet to come?
In the past 2 years, gold has increased a whopping 50%, yet more is to come! Armed with the right knowledge you can be a part of it.
To see why Chris recommends Credit Suisse gold bars as an entry to gold bullion, visit his Suisse Gold blog.
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Keywords :
credit suisse gold bars,
Category :
Finance
:
Investing
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