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Kitco - Bullion Dealers |
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Insights into the Gold and Silver Market – An Interview
with Kitco’s Jon Nadler, Investment Products Analyst
With currencies now fluctuating and the upward trend of gold investment on
the rise, a look at the history of precious metals investing is a wise call
in today’s current market. In a recent interview with Investor Ideas, Jon
Nadler, Investment Products Analyst with Kitco Bullion Dealers and regular
contributor to MarketWatch, offered some insight on where gold and silver
presently stand.
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Insights into the Gold and Silver
Market – An Interview with Kitco’s Jon Nadler, Investment Products
Analyst
With currencies now fluctuating and the upward trend of gold investment on
the rise, a look at the history of precious metals investing is a wise call
in today’s current market. In a recent interview with Investor Ideas, Jon
Nadler, Investment Products Analyst with Kitco Bullion Dealers and
regular contributor to MarketWatch, offered some insight on where
gold and silver presently stand.
As gold appreciation is so closely tied to currency fluctuation, what
would you perceive to be gold's investment interest in relation to that of
silver, over the next period? How wise is it to be looking at investment in
silver at this point in time?
During bull market periods in precious metals, it usually takes fewer and
fewer ounces of silver to purchase an ounce of gold. Generally, in such
periods, the price performance of silver outshines that of gold (in the 1980
bull market silver's performance was three times better than that of gold).
We expect great feats from silver in coming months and years. We are
however, fully aware that the white metal is primarily an industrial
commodity (albeit one gifted with more than a few historical monetary
attributes) and that its fate is inexorably tied to copper production, as
well as hopefully, continuing strong demand from Asian countries.
Within the scope of buying precious metals as an insurance policy for one's
portfolio, silver does make sense once the core gold allocation has been
accounted for. As the monetary role of silver tends to reassert itself
during gold bull markets and the spill-over effect (“poor man’s gold) takes
hold in the investment community, silver also shines.
Do you see gold continuing to lead over currency over the next two years?
Actually, we see gold as a currency. Gold is a trans-national (borderless)
currency and as it has always signified ‘real money,' it fits all of the
conventional definitions of what money is
supposed to be and how it is supposed to behave. One major difference is,
you cannot print more gold at will, as you can paper money.
In that sense, yes, we do see gold outperforming currencies. We have a bull
market in gold in all major currencies -certainly since last summer.
However, we believe that rather than witnessing a bull market in gold per
se, we are seeing an erosion of the purchasing power of paper banknotes, as
their supply appears to be on the rise.
What would you say are the major factors influencing gold's increased
investment interest, on a global scale?
The price of gold, as well as its share of the allocation model in the
portfolios of individuals and institutions (funds, central banks etc.) is on
the rise due to a series of converging fundamental factors. Namely, the
delicate balance of supply versus demand remains favorably tilted from an
investment perspective.
We have recently witnessed the lowest levels of production in over seventy
years from a pillar of former supply- South Africa. At the same time, how
can anyone ignore the 10-15% rises in gold demand coming from the economic
engines of the world, for example in China and India? Underlying these basic
market-shaping numbers, lies a rise in global political tensions (Iran comes
to mind), a developing 'house-of-cards' scenario in US real-estate prices,
and the growing triple threat created by the government, trade and consumer
deficits in the United States.
Some advisors have been telling us that "the most significant buyers over
the past few years have been individuals. Gold goes to where the wealth is
being created." What do you interpret to be some of the most prominent
individuals and or countries who have taken an increased interest in
accumulating gold?
It is true that individuals with prudent foresight have been 'armor-plating'
their investment portfolios, with a golden lining ever since gold touched
$252 half a decade ago. Over the past couple of years and certainly in the
past eight months many a fund and mainstream money manager have capitulated
and acknowledged that gold is back and back with a vengeance.
Now, we must assume that the interest, as well as real buying exhibited by
institutional minds is not some short-term infatuation with gold. Perhaps
they are finally catching on to the fact that even the most optimistic
scenarios they could paint for the economy, the Dollar and the stock market
must take into account not only risk (which is something they are quite
adept at hedging against) but also uncertainty- a complete wild-card factor,
against which one can only prepare by owning gold. As the quest for
preserving capital takes precedence over the evermore elusive quest for
"sure-fire" double -digit gains in the 'conventional' investment asset
classes - gold appears to be the vehicle of preference for this journey.
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KITCO Profile |
Over the past 28 years, Kitco has deservedly earned the reputation of being
the world’s premier retailer of precious metals. Kitco offers a complete
line of quality bullion coins, bars, and storage programs to individual and
institutional investors worldwide.
Most people have come to know Kitco via its hugely popular Website, which is
the most frequently accessed precious metals information site on the
Internet (over 2 million visits per week), as well as the 3,000th most
popular Website worldwide. Whether it is for purchasing gold coins or bars,
accessing live precious metals prices, researching charts or reading
up-to-the-minute market commentaries, people all over the world know they
can rely on Kitco’s unsurpassed, high-quality information and services.
http://kitco.com/
Jon Nadler, Investment Products Consultant
Jon’s precious metals career encompasses 30 years of extensive client asset
management, metals market analysis, and direct metals sales experience. His
career achievements include establishing or managing retail precious metals
operations at three major financial institutions (Deak-Perera, Republic
National Bank, and Bank of America). Jon has long-established business ties
with all major governmental mints( US Mint, Royal Canadian Mint, Perth
Mint), reputable precious metals dealers (Kitco, GoldMoney, Asset Strategies
International), the precious metals wholesale trade, and industry membership
organizations (the World Gold Council, The Industry Council on Tangible
Assets) . Jon is frequently quoted in the U.S. and Canadian financial media
(ROBTV, CBC Radio, Forbes.com, and MarketWatch) for market analysis and for
investor education on precious metals. |
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