Mr. Thurtell: I think basically in the last couple of months, a few factors have pushed it to new record highs. Probably the main factor was renewed dollar weakness and still very, very loose liquidity conditions throughout the world, with a lot of central banks maintaining ultra-easy monetary policy. Central banks and other investors want to diversify away from U.S. dollar holdings, and that's really given the market an extra fillip as well. In November we saw the Indian central bank, Reserve Bank of India, and other Asian banks buying significant amounts of gold. I think there's a view that the fortunes of the U.S. dollar or the U.S. economy generally are not as strong as they have been. The U.S. economy is starting to rebound after the crisis, but I think the consensus is that the recovery will be a slow one. I think the outlook is for the U.S. economy to experience modest growth this year and next. But there are still quite a lot of problems to work through, with banks on some of the loans they've got. There's still a chronic housing oversupply. Generally speaking, the outlook for the U.S. economy is just not what it was a couple of years ago. In contrast, in other countries and regions, particularly Asia, the prospects are much more promising. So people are wanting to get out of U.S. dollar holdings and U.S. dollar assets, and go into other assets, such as gold. I might tell you that although they've been getting out of the U.S. dollar, they haven't been rushing towards things like the euro and the yen. European growth is very, very poor. A lot of banks have got big problems in the eurozone. And Japan has had a shocking downturn in industrial production. And even now that it's rebounding significantly, levels of activity are still a long way below where they were a year or more ago. So the outlook for the eurozone and Japan - in other words, for the euro- and yen-denominated assets - aren't that fantastic either. So while people are getting out of the U.S, they are not rushing for the euro and yen; they're trying to look at what other assets they can look to. Gold is one of them, and I think metals and other resources more generally. China needs this stuff, and India will need them in 10 years' time industrially. India really is being mentioned a lot more these days. A lot of cars are being made for the Indian market, and in the industrial and metal space, copper, aluminum, zinc, platinum and palladium are very much sought after. So the outlook is that emerging Asia will need lots of metals, and that's really being quite positive for base metals, industrial metals and for gold.
Generally speaking, gold has had a great run for the last decade. Basically, in my view there were three or four main driving sectors. The first was the very, very long decline in the U.S. dollar against the euro and other major currencies. Second one was the de-hedging that was done by gold producers around the world. At the start of the decade there was more than 3,000 tons of gold hedged by major gold producers. As of the last decade, we've seen that hedge book unwound by more than 2,500 tons. So producers have bought back the forward sales they had put on in the 1990s.
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.