"The fundamental argument in favor of gold remains intact" - Wealth Management

Incrementum-Erste Group report sets $1,480 12-month target en route to $2,300

We are firmly convinced that the fundamental argument in favor of gold remains intact.

There exists no back-test for the current era of finance. Never before have such enormous monetary policy experiments taken place on a global basis. If there was ever a time when monetary insurance was needed, it is today. ...

We believe gold should continue to be an integral part of investment portfolios. Gold is the only liquid investment asset that neither involves a liability nor a creditor relationship. It is the only international means of payment independent of governments, and has survived every war and national bankruptcy.

Its monetary importance, which has established and manifested itself in the course of the past several centuries, is in the process of being rediscovered. Contrary to 1979/1980, the current gold bull market will unlikely end due to a sudden strong rise in interest rates, as the balance sheets of governments, households and corporations are tainted by huge debt. In the current environment, this would lead to a deflationary depression. ...

From a technical perspective, we assume that the gold price is in along term consolidation phase since its all-time high in August 2011, similar to the mid cycle correction of 1974-1976.

Due to extremely negative sentiment, the clearly positive implications of the CoT data, and extremely oversold readings, we assume that a bottoming process will soon begin.

From a seasonal perspective, only very little momentum should be expected before August.

Regarding the sentiment backdrop, we see anything but euphoria in gold. Skepticism, fear and panic are never observable at the end of a long-term bull market.

We therefore assume that our long-term price target of $2,300 per ounce, already formulated several years ago, remains realistic. In the course of the price collapse, massive technical damage has been inflicted. We are therefore strongly convinced that repairing the chart picture is going to take some time. We regard the $1,480 level as the next 12-month target.

More information can be found online at http://www.goldbullionadvisors.com