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Demand and uncertainty holding gold bullion to its strong long-term trend.

April 01, 2011 – Demand for gold is climbing and the reasons for buying gold bullion are growing stronger every day. But wait! We have 216,000 new jobs! Hallelujah!

Of course that’s but 1.6% of registered job seekers, and a much tinier percentage of the structurally unemployed. And the backbone of Bernanke’s plans for recovery – exports – is on the ropes.

Global trade is declining at the steepest rate since the Great Depression but far be it from the Fed to learn from history. And far be it from our politicians not to dangle the trade protection carrot in front of us voters, even as the world withdraws behind their own walls.

New protectionist measures are being taken at the remarkable clip of one each day, says Richard Barley in the Wall Street Journal. That on top of capital controls to hold back the floodwaters of cheap dollars. And while QE2 is gratefully slated to end in June, rumors of QE3 are already flying.

Meanwhile the Middle East political unrest is spreading like a wildfire, the European sovereign debt crisis has taken another turn for the worse, and Japan is up to its neck in catastrophe. It’s not looking very good out there.

Some folks are doing OK, though, and they are putting their money where its safe. India, already the world’s largest gold consumer, is expected to increase its consumption by 3% every year for the next decade according to World Gold Council estimates. And China is steadily liquidating its currency-tied holdings and stockpiling gold.

I don’t want to knock good news – we all could use a little encouragement now and then. The danger is in narrowing our vision to those reports so we lose sight of the big picture. We can’t afford to delude ourselves that everything will be better soon. The problems we – and the world – face are too serious and too numerous to ignore.

The occasional positive signs account for the daily volatility in the price of gold, but the overarching uncertainty in the global economy coupled with the growth in demand are holding the medium to long-term forecasts for gold bullion to its strong upward trend.

Daily Updates Archive

Jonathan Monroe

Senior Staff Writer -

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