"Bull market in gold will resume in time," predicts Schroder manager - Wealth Management

"A new all-time high will be established" as bonds sell off

Gold's bull market is intact and prices will reach a new high as declines in bonds and equities boost demand and investors seek insurance against economic and political risk, according to Schroder Investment Management Ltd. ...

"The gold bull market is still intact," Christopher Wyke, a product manager for emerging-market debt, currencies and commodities at Schroder, said in an interview in London. "The fundamental reasons why people are buying gold are still there. We have economic risk, political and market risks, and gold will provide protection. Although the current correction may not have ended, we believe that the bull market in gold will resume in time and that a new all-time high will be established." ...

One of the effects of Bernanke's comments is the equity markets in many parts of the world will sell off," Wyke said June 20. "Bonds are selling off already, and there is risk of equities in some markets falling sharply as well. Going to gold as protection is going to become more important as markets are falling." ...

"If interest rates are going up, you don't want to hold bonds," Wyke said. "Most investors have far too much in bonds, and I think some of that money will go to gold." ...

"Historically, the dollar going down, inflation going up has been good for gold," Wyke said. "Even if those two things didn't happen, all the risks the world is facing mean that outlook for gold is good, and the fall in the gold price below $1,300 will provoke demand. People will be able to buy more."

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