Gold fever strikes investors as precious metal soars

Two elements will continue to contribute to a rising gold price for the foreseeable future, he said. The first one is a rising oil price.

Nick Barisheff, portfolio manager of the Millennium Bullion Fund at Bullion Management Group Inc., says “Production is in decline. We hit peak oil production apparently in February 2006 … (meanwhile) demand is rising” in North America, China, India, Russia and Brazil.
“That situation isn’t going to be corrected in any way in the foreseeable future,” said Barisheff. “Even if we found a huge oilfield, it would take between five and 10 years to get it into production.”

The rising oil price has two implications. “It’s highly inflationary because oil is used in everything we do or make or eat,” he said.

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