Donald Doyle, Chairman & CEO of major U.S. coin and precious metals dealer reckons gold will hit new nominal highs again this year as its 10-year bull run continues
Posted: Tuesday , 04 Jan 2011
NEW ORLEANS (BLANCHARD & CO.) –
Gold performed strongly in 2010, and analysts at Blanchard and Company believe that the precious metal will continue its current 10-year bull run until it reaches the real all-time high first achieved in 1980, which would be about $2,300 in today’s dollars.
“Gold gained 28 percent in 2010, and over the last 10 years it is up more than 400 percent,” says Donald W. Doyle, Jr., Chairman and CEO of Blanchard and Company. “While gold has been trading near its nominal high above $1,400, we see plenty of room for continued long-term moves up, especially in the current global economic climate.”
Doyle says there are numerous factors that he believes will propel gold’s price in 2011:
· Currency Instability. Institutions, central banks, and investors will continue to diversify into gold as a currency and out of the euro and dollar as these paper currencies suffer weakness. The European and U.S. economic crises will continue to damage the value of both currencies.
· Geopolitical Conflicts. Tensions in the Middle East remain high and the conflict between North Korea and South Korea is escalating with no end in sight.
· Increased Consumer Goods Prices. While the CPI and PPI indices do not indicate high inflation, consumers are getting hit with increased prices on essential goods in the form of gasoline and groceries, and the outlook for additional increases has been predicted by numerous economists as emerging markets generate more demand. Considering that gold has performed strongly during the current period some have described as deflationary, it should perform even better if the overall economy experiences full-fledged inflation.
· Raising the U.S. Debt Ceiling. One of the first post-election votes by the House in February is to raise the nation’s debt ceiling – a vote that could cause major economic turmoil. With many new Representatives being on record against raising the debt ceiling without also cutting spending, they single handedly could filibuster any such bill and send the country into default.
Most of these issues are long-term with no easy solution, leading Doyle and his analysts to predict that 2011 will be another good year for gold with a new nominal high in short order. Blanchard says it projects a new high of $1,650 in 2011.