Quick Take: Gold May Have Bottomed

Despite widespread bearish comments about gold, flows into Gold Bullion International have been strong, says Savneet Singh, co-founder of the firm.
By Bret Kenwell ,

NEW YORK (TheStreet) -- Although gold price fluctuations have been crazier than ever, have we finally witnessed a bottom? Here with his take is Savneet Singh, co-founder of Gold Bullion International, alongside TheStreet's Gregg Greenberg.

Gold began to move higher after yesterday's FOMC minutes and we are seeing a continuation of that move today. The driver? Dovish comments from

Federal Reserve

Chairman Ben Bernanke, who also said that interest rates would not be rising anytime soon.

So after the wild run in gold, where the yellow metal ran upwards of $1,900 per ounce before cratering to sub-$1,200 levels in June, did it finally hit rock bottom?

According to Singh, it might have. The violent downward move flushed out a lot of speculative investors in gold, leaving only natural, fundamental buyers at these levels.

He added that 80% of gold purchases occur outside the U.S. He cites emerging-market growth and emerging wealth from Asia as the primary drivers for gold going forward.

So although the precious metal does appear to trade like a stock, it actually has many fundamental components behind it.

Even though it feels like everyone on Wall Street has turned his or her back on gold, Singh said he is seeing larger inflows than ever before. This would indicate that people are recognizing the value in gold and buying it with the plan of holding it over the long term.

-- Written by Bret Kenwell in Petoskey, Mich.

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Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

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