12 Gold Bugs Bring Christmas CheerJeff Clark Its a tad puzzling that gold hasnt broken into new highs, despite enough catalysts to move a herd of stubborn mules. But thats the hand were dealt right now. We cant get up from the table until the game reaches its conclusion. Besides, I think the stall in prices is giving us one last window to buy before prices break permanently into higher levels for this cycle. At least thats how a number of prominent investors and institutions are viewing the price action right now. Heres a sampling of this years gold bugs and what theyve been doing about precious metals recently. Jim Rogers, billionaire and cofounder of the Soros Quantum Fund, publicly stated last month that he plans to sell federal debt and purchase more gold and silver. George Soros increased his investment in GLD by a whopping 49% last quarter, to 1.32 million shares. His stake is now worth over $221 million. Many investors dont realize that he also placed call options on GDX worth $9 million. The most logical explanation is that he thinks gold equities are undervalued and that theres big money to be made in them within a year. Brent Johnson, a San Francisco hedge-fund manager, believed in gold so much that he started his own gold fund, Santiago Capital, earlier this year. His latest video points out that there have been 278 global easing moves in the last 14 months. How does someone not own gold in that kind of environment? Don Coxe, a highly respected global commodities strategist, stated at the Denver Gold Forum that now is the best climate I have ever seen for an increase in gold prices. He told fund managers, mining analysts, and mining executives to prepare for significantly higher gold prices and thus higher gold-mining-stock valuations. The opportunities ahead are the best Ive seen. He thinks a new gold rush is ahead for gold stocks, and that a lustrous rally will occur within a year. Jeffrey Gundlach, cofounder of DoubleLine Capital, predicts that deeply indebted countries and companies will default sometime after 2013. Central banks may forestall these defaults by pumping even more money into the economy but at the risk of higher inflation in coming years. He recommends buying hard assets including gold, and also gold-mining firms because we consider them to be bargains. Rob McEwen, CEO of McEwen Mining and founder of Goldcorp, is buying precious metals because he believes gold will someday hit $5,000 and silver $200. Savneet Singh, a former investment analyst at Morgan Stanley, was frustrated with the options available to acquire physical gold in an allocated, whole-bar format outside the banking system. He started Gold Bullion International, the platform service used by the Hard Assets Alliance, a service that virtually does away with the need to buy GLD. This is only a handful of individual investors who have made recent news with their bullion buying. But institutions, governments, and others are participating, too Central Banks These data suggest in and of themselves that dips in the gold price are likely being bought and will continue to be bought by central banks. Theyre not exactly short-term traders. Remember, central banks were net sellers as recently as 2009, so this reversal will likely play out for years. India. I tire of the reports that proclaim something like, Indian buying dropped this month! Lets be clear about India and gold: Imports have more than doubled in three years (through 2011), and investment demand has climbed almost fivefold. And all this occurred while prices were rising and from a nation that already has a strong cultural predisposition towards the metal. Further, silver demand is taking off: sales have jumped 24% this year over last. There is some government interference, but no slump in demand in India. This trend will continue and may even strengthen when inflation begins making front-page headlines. Germany. A precious-metals group recently reported that Germans are increasingly buying gold because of fears about economic uncertainty, and that a third of citizens are now considering gold as part of their investments. There has been a significant increase in demand in recent months because of worry about actions taken by the European Central Bank and US Federal Reserve, as the two central banks seek to counter the euro zone crisis and slow US economic growth. Commercial Banks Eric Sprott recently wrote: If the Basel Committee decides to grant gold a favourable liquidity profile under its proposed Basel III framework, it will open the door for gold to compete with cash and government bonds on bank balance sheets and provide banks with an asset that actually has the chance to appreciate. Given that US Treasury bonds pay little to no yield today, if offered the choice between the liquidity trifecta of cash, government bonds or gold to meet Basel III liquidity requirements, why wouldnt a bank choose gold? Well be watching the news on this topic. We can all speculate about when the next leg up for gold will kick in, but the point for now is to take advantage of the weakness, like many of these gold bugs. When the price breaks out of its trading range, are you sure you wont wish youd bought a little more? I say give you and your loved ones a lasting Christmas gift and call your favorite bullion dealer. Now is a great time to give yourself another gift one that will make next years holiday season even brighter. Theres currently an anomaly in the metals market that can bring astute investors life-changing gains. Learn more about it and get started today. linkwithin_text=Related Articles: 