Merrill Lynch States Some Wealthiest Clients Insisting On Delivery Of Physical Gold

Discussion in 'Wall St. News' started by ByLoSellHi, Jan 11, 2009.


    Merrill Lynch says rich turning to gold bars for safety

    By Ambrose Evans-Pritchard
    Last Updated: 10:32AM GMT 09 Jan 2009

    Rich investors are spurning gold exchange traded funds in favour of krugerrands

    Merrill Lynch has revealed that some of its richest clients are so alarmed by the state of the financial system and signs of political instability around the world that they are now insisting on the purchase of gold bars, shunning derivatives or "paper" proxies.

    Gary Dugan, the chief investment officer for the US bank, said there has been a remarkable change in sentiment. "People are genuinely worried about what the world is going to look like in 2009. It is amazing how many clients want physical gold, not ETFs," he said, referring to exchange trade funds listed in London, New York, and other bourses.

    "They are so worried they want a portable asset in their house. I never thought I would be getting calls from clients saying they want a box of krugerrands," he said.

    Merrill predicted that gold would soon blast through its all time-high of $1,030 an ounce, and would hit $1,150 by June.

    The metal should do well whatever happens. If deflation sets in and rocks the economic system it will serve as a safe-haven, but if massive monetary stimulus gains traction and sets off inflation once again it will also come into its own as a store of value. "It's win-win either way," said Mr Dugan.

    He added that deflation may prove the greater risk in coming months. "It's very difficult to get the deflation psychology out of the human brain once prices start falling. People stop buying things because they think it will be cheaper if they wait."

    Merrill expects global inflation to hover near zero, with rates of minus 1pc in the industrial economies. This means that yields on AAA sovereign bonds now at 3pc will offer a real return of 4pc a year, which is stellar in this grim climate. "Don't start selling your government bonds," Mr Dugan said, dismissing talk of a bond bubble as misguided.

    He warned that the eurozone was likely to come under strain this year as slump deepens. "There is going to be friction as governments in the south start talking politically about coming out of the euro. I don't see the tensions in Greece as a one-off. It is a sign of social strain in countries that have lost competitiveness".
  2. Thang is.

    Everyone will have gold.

    No one will need it.

    U lose.
  3. I would be extremely surprised if there was ever a time when "some" clients weren't buying physical metal.
  4. WRONG, WRONG, WRONG..........FEW will have DA GOLD!

    Actually.....VERY FEW!!! :eek:
  5. You surely are j0king. Every nitwit is buying physical gold.

    I want to buy what the gold SELLERS are rolling into, cause gold aint it.
  6. talknet


    I think rich people buy gold when they sense "big wars". Read this thread "Is World heading towards World War III?"
  7. So, to sum up the article, Merrill Lynch is long gold and they want as many readers as possible to be long gold too. Don't worry. Their analysts are completely separated from their investment division.
  8. hmmm these guys could get burned, BIG TIME!
  9. And they will beg for a bailout.
  10. You don't know what you're talking about.

    Most don't even have the spare funds to buy gold contracts, let alone pay the full price for physical. Like you.

    If they have the money, it's a toss up whether they even have made any steps to purchase.
    #10     Jan 12, 2009