Ed at Forbes on Gold Demand
FOCUS: ETF Outflows Overshadowing Strong Physical Gold Demand: Ex-US Mint Director
By Debbie Carlson of Kitco News
Quote:
“Because of our fiscal situation and because of the worldwide economy, there’s going to be greater volatility in the price of gold. But as long as the (U.S.) deficit is rising,” gold prices will rise, Moy said.
“Longer term, what a lot of gold investors do not understand is that the gold price and demand is (affected) by the debt ceiling and how close we come to hitting it. The correlation is lock-step,” he said.
Quantitative easing by the Federal Reserve had a huge impact on gold demand, he said. “If you look at the debt ceiling, which is $16.4 trillion, move the decimal point over 10 steps and you get $1,640, so that shows you that the gold price is about right where it should be,” Moy said.
The last time the U.S. was about to hit the debt ceiling, the debt ceiling was $14.5 trillion and “gold was right around $1,450,” he said.
Read the full piece at Forbes.com
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