7 gold-bullish snapshots from around the world - Wealth Managers

The yellow metal retains legions of believers from Australia to Vietnam

Despite gold's correction this year, it remains a scarce, highly valued asset around the world. These snapshots from seven different nations suggests that bullion's future is bright despite recent temporary price turbulence.

An Australian founder of the ETF industry remains bullish. Cyprus' president reaffirms that it has no plan to sell its gold reserves. Despite government restrictions on gold in India, the upcoming monsoon season looks promising. A Russian mining mogul is calling a rebound in gold by next year. South Africa's mining-industry unrest means supply will remain restricted even as worldwide demand stays strong. Several London money managers think the bull market can resume. And the Vietnamese people still see gold as their primary savings vehicle and a shield against inflation.
AUSTRALIA: Hold gold as an insurance policy, hope it underperforms the rest of your portfolio, and expect it to beat investing in gold companies over the long term: that's the advice of entrepreneur, philanthropist and BRW rich-lister and ETF Securities chairman Graham Tuckwell.

Tuckwell is credited as being one of the founders of the $1.3 trillion exchange-traded funds industry. According to the BRW Rich List, he's worth $775 million for his 50 per cent stake in ETF Securities. ...

"I'm a great believer in longer term commodity cycles," Tuckwell says. "I also thought it was a great idea from an investment perspective because so many investors had invested in gold companies in Australia and yet a lot of them really didn't create much in the way of value. ... When I analysed gold companies in relation to gold, the gold tended to outperform."
CYPRUS: Cypriot President Nicos Anastasiades said on Friday he hoped there would never be a need for the island to sell its gold reserves, stipulated in an international bailout for Cyprus.

A sale of its gold reserves is among options for Cyprus as its contribution toward an financial lifeline thrown to the island nation in March, but Anastasiades said responsibility for the issue rested with the island's central bank.

"I want to believe there will never be such a need," Anastasiades told a news conference in Nicosia. "The issue is not being discussed by the government, it is a responsibility of the central bank," he told reporters.
INDIA: "The festival season will see reemergence of demand and around that time, the harvest season will also begin and with the present state of the monsoon, it is expected to be a bumper harvest," said Gnanasekar Thiagarajan, a director at Commtrendz Risk Management Services Pvt. "Genuine physical demand is not expected to moderate due to Reserve Bank of India measures."

The monsoon, which accounts for 70 percent of the nation's rain, was 16 percent above a 50-year average during the June 1-July 16 period, according to the India Meteorological Department. Abundant rains have boosted planting of the monsoon crops, brightening prospects for a bumper harvest and increases in incomes of farmers, who invest in gold mainly as savings.

"At the end of the day, there will be imports happening because people will always buy," said Praveen Gupta, general manager for bullion at Shree Ganesh Jewellery House Ltd. 
RUSSIA: Nordgold NV, the producer controlled by Russian billionaire Alexey Mordashov, said a recovery in prices for the metal to $1,500 an ounce is possible by 2014.

"Physical demand from the jewelry industry and central banks in emerging markets is still in place, although we saw an outflow of investors" from exchange-traded funds, Chief Executive Officer Nikolai Zelenski said in an interview today. He sees the price recovering in the next 12 to 18 months, "with $1,500 an ounce possible if not this year, then in 2014," he said by phone from Moscow. Gold may trade in a $1,100-to-$1,500 range for the rest of the year. 

SOUTH AFRICA: The problems for the sector run far deeper than [South African mining labor conflicts], said SBG Securities gold analyst David Davis. Using the new cost reporting metrics proposed by the World Gold Council last month, the average all-in cost for the world's top five global gold mining companies was $1,467/oz in the first quarter of this year against the current spot price of $1,287/oz, Mr Davis said in a note on Friday.

By next year, about half of global production will need a break-even gold price of $2,400/oz, using a 10% year-on-year mining inflation assumption, he said.
 UNITED KINGDOM: "If you need to insure yourself against quantitative easing in the developed world, or inflation issues, or growth issues in the United States, I would say gold is actually a very cheap put option on those problems," London & Capital CIO Pau Morilla-Giner told Reuters.

"Volatility is making buying into gold at these levels really quite challenging," Barings fund manager Clive Burstow said. "A big macro shock could change the game for gold ... but we think there's enough (ingeniousness) out there to get us through these problems. The trend in our view is upwards, but it is a long, slow grind up."

"The dollar will peak sooner or later, inflation will rise and (U.S. shares) will run out of steam at a time when gold will be heavily oversold," Charles Morris, head of absolute return at HSBC Global Asset Management, said. "All in all, I see a new bull market beginning within the next year or so." 
VIETNAM: The target of Vietnam's campaign to stabilize its currency is in the locked bedroom wardrobe of retired civil servant Vu Thi Huong: gold bars.

"It's been my habit for ages, buying gold whenever I can save up some money," said Huong, 57, who watches the financial news every day to monitor the price of the precious metal. "With gold, I can save my fortune and later on have something valuable to pass down to my children and grandchildren."

Huong is among millions of Vietnamese who hold an estimated 300 tons to 400 tons of bullion to store their wealth -- valued at as much as $19 billion at domestic prices and equal to official U.K. holdings -- a legacy of more than a century of war, revolution and economic turbulence. ...

"These habits are deeply ingrained," said Jonathan Pincus, an economist with the Harvard Kennedy School's Vietnam Program in Ho Chi Minh City.

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