"I don't recommend gold as only an 'anti-dollar' investment. If that's all you wanted, you could get that more directly by shorting the dollar on the Forex markets," says DiGeorgia. DiGeorgia points to these five reasons, as to why gold will continue to climb, even after almost doubling in price since 2004.
1.Currency depreciation. In times of declining currency value, investors around the globe will be looking to gold to prevent portfolio erosion.
2.Gold's supply-demand deficit. The deficit is real, and in favor of gold's continued bullish run.
3.Gold and oil historically track each other's gains. With oil hitting new record highs, gold is poised to do the same.
4.Investor demand is rising. It's at 19% of all gold demand, but far from the record highs set in the 1970s. This will further strain the supply-demand deficit.
5.Private investors now hold more gold than the world's central banks, preventing those banks from controlling the price of gold.
"The yellow metal is an excellent investment in its own right. Look at its fundamentals: Last year, gold's mining supply was 2,106 tons. Demand was 3,374 tons. Thus, demand exceeded mining supply by 1,268 tons. The metal's supply- demand deficit is very real," concludes DiGeorgia.
