Prospective Puerto Rican John Paulson may have an unpleasant tax problem here in New York, but he’s got a bigger problem with his biggest investment. Despite his faith in and love for shiny objects, the rest of the world simply does not share his insatiable appetite for gold.
One can understand his frustration. The time seems to be ripe for another historic gold rally:
Gold futures are bumping up against resistance at the well-traveled $1,600 marker, as traders watch European and US economic data diverge. Some analysts point to India’s spring wedding season, an auspicious time to buy gold, as another factor that’s likely to lend prices some support.
Low interest rates and a cash-flush financial system tend to draw investors looking to preserve their wealth into gold and other hard assets.
Gold futures have also benefited from investors who recently re-entered the market in search of a bargain. Some market participants believe that gold’s retreat to seven-month lows was temporary, and saw this as an opportunity to buy the metal before prices resumed their upward march.
[T]alk of $2,000 gold seems all but gone.