Gold Bullion Is “Long Term Insurance Policy” – HSBC’s Steel

Gold bullion is a “long term insurance policy” according to James Steel, chief commodities analyst at HSBC, who spoke with Tom Keene about what’s driving gold markets on “Bloomberg Surveillance” yesterday.

(Source: Bloomberg)

In Bloomberg’s “Single Best Chart,” Keene displays inflation adjusted ‘London gold prices’ going back to 1950.

Steel is cautious on gold in the short term but positive in medium and long term and thinks gold will “churn higher.”

When asked about whether he has a “message for gold bugs … people who have Krugerrands in their dressing room drawer”, Steel spoke of gold’s portfolio insurance benefits and “the diversification argument is the most powerful … it is an insurance policy”.

A better question would be what is his message to typical retail investors – or”paper bugs” if one wishes to be pejorative – who have no allocation to gold bullion whatsoever and whose investments and savings are at risk due to the looming next phase of the global financial crisis.

Watch interview here

Gold and Silver Prices and News
Gold Climbs on Investment Demand as Goldman Raises Forecast (Bloomberg)
Gold sticks near 2-week low on firm dollar, equities (Reuters)
Goldman Raises Gold Forecast While Retaining Bearish Outlook (Bloomberg)
Demand for gold on the rise amid uncertainty in global markets (HBL)
Britain’s biggest ever gold nugget ‘worth £50,000’ discovered in Wales (Telegraph)

Singer Says Gold Rally Just Beginning as Central Bankers Doubted (Bloomberg)
Keiser Interviews Rickards About Gold (Youtube)
New York Court Investigates Claims Silver and Gold Prices Rigged (AFR)
Comex Gold Open Interest (ZH)
SWOT Analysis: Will the Gold Rally Persist? (GoldSeek)
Read More Here

Gold Prices (LBMA AM)
11 May: USD 1,264.85, EUR 1,111.04 and GBP 875.90 per ounce (To be updated)
10 May: USD 1,264.85, EUR 1,111.04 and GBP 875.90 per ounce
09 May: USD 1,277.75, EUR 1,121.54 and GBP 884.68 per ounce
06 May: USD 1,280.25, EUR 1,121.06 and GBP 883.04 per ounce
05 May: USD 1,275.75, EUR 1,114.95 and GBP 879.23 per ounce
04 May: USD 1,280.30, EUR 1,114.18 and GBP 883.59 per ounce

Silver Prices (LBMA)
11 May: USD 17.04, EUR 15.00 and GBP 11.82 per ounce (To be updated)
10 May: USD 17.04, EUR 15.00 and GBP 11.82 per ounce
09 May: USD 17.33, EUR 15.21 and GBP 11.99 per ounce
06 May: USD 17.31, EUR 15.15 and GBP 11.93 per ounce
05 May: USD 17.38, EUR 15.21 and GBP 12.01 per ounce
04 May: USD 17.18, EUR 14.96 and GBP 11.86 per ounce

 


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Mark O'Byrne

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