Gold News

Gold in Mid-Summer

One more month to go before Gold's usual "summer doldrums" lead to its regular autumn rise...

BANKS CONTINUE to shirk debt, writes Julian D.W. Phillips of, fearing that a continuation of slack lending practices will hurt their bottom line more still.

   That means credit deflation will continue alongside other ills in the financial markets, threatening to depress the US economy even more. So the Federal Reserve, in setting its interest-rate policy, must err on the side of growth and allow inflation to grow. The alternative – fighting inflation – simpy cannot be considered.

Doubts about banking, inflation, credit deflation and the value of the Dollar continue to favor Gold and silver and will do so for the medium if not long term as well.

   Gold has one more month before its 'season' – following the usual summer doldrums – begins again. So sellers are moving to the cautious side now. Apart from hope that things can't be so bad, there is little reason not to Buy Gold as defense against the on-going problems in global finance and credit.

For the Gold Price to hold its current levels, at this time of the year, is encouraging. We are seeing an expression of investment demand almost in the absence of physical demand. (Read more about the picture for Indian Gold Demand here.) This is telling us that, when they weigh up the future of the banking system and paper currencies against Gold and silver, investors hold a solid belief that precious metals have a place in prudent portfolios.

None of the measures taken to date by the developed world's central banks so far have addressed the fundamental structure of the monetary system, so we can only expect more 'fire fighting measures' in the future and the atmosphere of uncertainty to persist. The credit crisis is a reflection of the banking system and how dependent we are on it.

The environment continues to favor Gold and silver as a safe-haven against these fears.

JULIAN PHILLIPS – one half of the highly respected team at – began his career in the financial markets back in 1970, when he left the British Army after serving as an Officer in the Light Infantry in Malaya, Mauritius, and Belfast.

First he worked in Timber Management and then joined the London Stock Exchange, qualifying as a member and specializing from the beginning in currencies, gold and the "Dollar Premium". On moving to South Africa, Julian was appointed a macro-economist for the Electricity Supply Commission – guiding currency decisions on the multi-billion foreign Loan Portfolio – before joining Chase Manhattan and the UK Merchant Bank, Hill Samuel, in Johannesburg.

There he specialized in gold, before moving to Capetown, where he established the Fund Management department of the Board of Executors. Julian returned to the "Gold World" over two years ago, contributing his exceptional experience and insights to Global Watch: The Gold Forecaster.

Legal Notice/Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold Forecaster/Julian D.W. Phillips have based this document on information obtained from sources they believe to be reliable but which it has not independently verified; they make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold Forecaster/Julian D.W. Phillips only and are subject to change without notice. They assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, they assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this report.

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