Higher gold prices are inevitable, though not imminent, according to Brien Lundin, editor of Gold Newsletter.
Lundin delivered those remarks during the 40th annual New Orleans Investment Conference. Lundin is president and CEO of Jefferson Financial Inc.
According to Lundin, gold has been bouncing off a recent low at $1,180 when the Chinese and others buy in. Looking forward, the Federal Reserve’s policies of monetary debasement have created a huge overhang of money with quantitvative easing, Lundin said.
Quantivative easing is an unconventional monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective, according to Lundin.
"There’s no easy exit from its predicament, and every option makes higher gold prices virtually assured," Lundin said.
Marc Faber, editor of the Gloom, Boom and Doom Report, said gold could drop to $900 an ounce and put a lot of mines out of business, but the price would not remain there for long.
If central banks continue printing money as they have, gold could one day be $5,000, $10,000, or even $100,000 an ounce, according to Faber.
Mike Fuljenz, owner of Universal Coin and Bullion in Beaumont, Texas, attended the first half of the conference and came away with his own observations.
The most common theme expressed, Fuljenz said, was that "gold has probably bottomed, but don’t expect a big rally soon. There is still some downside risk. Marc Faber even threw out the number $900 as a potential low, but he had no concern that such a low number would last long. He then threw out some fabulously high numbers, including $100,000 gold. Commodities have always bounced back, he said, and they will bounce back this time, too. Most speakers expected the bottom to hold, but they warned of a long, slow, 'grinding' recovery, not an explosive rally, barring a dramatic geopolitical crisis."
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