Articles and News

New York, NY—Mary Ann Bartels, head of technical analysis for Bank of America Merrill Lynch Global Research, has added her voice to the chorus of financial analysts and economists who believe the current bull market for gold is long term, not a bubble about to burst.

In a video from the financial firm earlier this month, she says gold is part of a saecular (20-year) rise in commodities prices overall that began in 1999 and is unlikely to climax before 2018 or 2019. She predicts gold may well top out between $2,000 and $3,000 an ounce, with any short-term drops—including this week’s precipitous slide—taking it no lower than $1,400 the ounce.

“We’ll know we’re near the top when people stop asking if it’s in a bubble,” she said. Also, because gold and the US dollar have an inversely proportional relationship, a rise in the dollar may signal a leveling off of gold prices. See her full interview here. You also can read the interview transcript in PDF form here.

Separately, diamonds—which have been spiraling upward as well—met with extreme price resistance at the recent Hong Kong Jewellery and Gem Fair. An article in the GIA Insider newsletter says the world diamond industry had been looking to the show as a make-or-break event, but it turned out to be neither. Demand was there but high prices put a lot of buyers off.

Diamond companies cited a number of factors contributing to the price resistance, including increasingly tight credit that caused a number of exhibitors to sell cut goods at a loss in order to raise cash. This in turn put pressure on other dealers, and concerns about continuing problems in Europe and the United States, their major export markets.

Hong Kong shipping firms noted that cargo bookings from Chinese exporters have been running 10% below last year as Western retailers trim their orders for the fall season, said the Insider.

Read the full GIA Insider report here.

Finally, Philip Newman, research director of precious metals for Thomson Reuters GFMS, recently predicted silver could hit $50 an ounce by year’s end. In an interview with Kitco News at the London Bullion Market Association conference held last week in Montreal, he said if gold hits the $2,000 mark it could push silver higher, to as much as $50. Silver plays a dual role as both investment and industrial metal, whereas gold is largely investment-driven and platinum is largely industrial. Read the entire article here.