Gold News

Gold prices may soar in 'December surprise'

The editor of a respected gold investment publication has claimed that now could be a good time to buy gold as the economy will soon descend into a period of intense inflation, reports today (November 5th).

Brien Lundin, editor of the Gold Newsletter, has explained that the recent US dollar rally which has seen gold struggling to make gains - despite the economic turmoil - is down to two main factors.

Firstly, he notes that assets are being sold to meet margin calls and redemptions, and secondly, that European banks are buying dollars to fund redemptions from clients with dollar-based accounts.

However, Mr. Lundin added that this "short squeeze" on the dollar will only last for a very limited period of time and when it begins to reverse, gold prices could soar.

He told the website: "That short squeeze has elevated the relative value of the dollar over the near term. This situation won't last. But typically, when a rebound from a short squeeze occurs, there will be a dramatic move in the opposite direction."

When pressed on whether that would push up the value of physical gold, he said: "Absolutely. And over the longer term, that will happen eventually."

Mr. Lundin added that gold will be boosted as an inflationary environment is subsequently inevitable, because "the pendulum will have to swing hard in the other direction".

He also hinted that the upsurge in gold prices could occur sooner rather than later.

"I don't want to jinx it, but I think we could see a December surprise," he added.

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