Gold Investing: "Opportunity Cost Low"
THE OUTLOOK for Gold Investing "remains bullish" thanks low interest rates and continued economic uncertainty, according to a bullion bank's research note today.
In particular, says the latest Metal Matters from Scotia Mocatta – one of the 10 market-making members of the London Bullion Market Association – US Treasury bond yields are near record lows, making "the opportunity cost of holding gold low."
Physical Gold Investing pays no interest, of course. But nor does "safe haven" government debt today, meaning there's nothing lost in holding gold rather than bonds.
"The market needs to be fully aware that the bullish argument for gold will change once investors feel that the global economy is on the mend and solutions have been found to sort out the financial mess," today's report warns.
"However, there seems little chance of this happening any time soon, and with that in mind the outlook for gold remains bullish."
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