INTERNATIONAL. Charles Gibson, a gold expert at Edison Investment Research, argues in a new report that negative real interest rates in the US and beyond has upset the "leasing" machinery in the gold industry and led to a sustained market squeeze. This is what occurred in the late 1970s, driving gold prices to US$850 and ounce – roughly US$1,560 in today's terms. Gibson said the powerful dynamic could lead to a second leg of this gold bull market. There are already reports that gold bars and coins are becoming scarce in various parts of the world as more investors opt for physical gold rather than derivative products, on concerns about a possible break-down in the global financial system. Gibson's comments come as hedge-fund managers and other large speculators increased their net-long position in New York gold futures by 2% in the week ended April 14, according to US Commodity Futures Trading Commission data. Speculative long positions outnumbered short positions by 129,895 contracts on the Comex division of the New York Mercantile Exchange. Tony Daltorio, an independent analyst who spent 20 years at Charles Schwab, recently outlined eight main reasons for gold investment. Outlining one section of his argument, he told Seeking Alpha: "The selling of Gold Bullion from global central banks has slowed and production of new gold from mines has also been diminishing." "A basic economic rule of supply and demand would show that reduced supply should result in increased prices," he said.

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