TORONTO (Commodity Online): Gold prices are set to steadily rise in 2010 if pension and hedge fund managers move even 5% of their assets into gold, according to Nick Barisheff, President and CEO of Bullion Management Group.

Speaking at Empire Club in Toronto, Barisheff said gold prices are showing no sign of slowing as we enter 2010. Several significant events, such as the return of Western central banks as net buyers and the waning of support for the US dollar as the world's reserve currency, will continue to push gold higher.

Barisheff made clear an important fact for investors: "The current pull-back from the recent highs of $1,200 seems to be over, providing an attractive entry point for investors." All signs point to gold continuing its steady rise throughout 2010.

With the financial industry focused on gold, the question is "How high could the price go?" "Many have noticed that fund managers are starting to buy gold as long-term insurance. By one estimate, if the world's pension funds and hedge funds moved just 5% of their assets into gold, it would trade at $5,000," observed Barisheff.

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Barisheff went into detail about the factors driving the gold price, and why it will stay elevated for the foreseeable future.

"For the first time in two decades, central banks are net buyers rather than net sellers of gold," stated Barisheff during his speech to the Empire Club in Toronto. "In addition, 2009 marked the first time that financial gold purchases outpaced gold buying by the jewellery industry."

India's central bank purchase of over 200 tonnes of IMF gold, as well as significant buying activity in China and Russia, helped fuel prices in 2009 and will continue to do so in 2010. Barisheff also noted that the US dollar is losing popularity with some financial players. He noted rumours that have appeared in the media lately, speculating that the Arab Gulf states are planning, along with China, Russia, Japan and France, to stop paying for oil with US dollars, moving instead to a basket of currencies and gold.

"Although the central banks immediately rejected these rumours, the market treated their denials as a clear admission of guilt and Gold broke through year-long resistance at $1,020 an ounce into an entirely new trading range that day," he said. "The Iranian oil bourse, which allows oil sales in several currencies but not the US dollar, is another indication that this trend will continue."

Barisheff also discussed the growing imbalance between paper proxies, gold derivatives and physical bullion. In the future, the price of paper gold and the price of physical gold could divide.

"This isn't a typical bull market. Until governments around the world stop creating massive amounts of new money, the price of gold will continue to rise," says Barisheff.

Toronto-based Bullion Management Group Inc. is one of the world's fastest-growing precious metals bullion investment companies. Since 2002 BMG, through its subsidiary, Bullion Management Services Inc., has managed the CDN$290 million-plus BMG BullionFund, the world's first open-end mutual fund trust with a fixed investment policy of purchasing equal dollar amounts of uncompromised gold, Silver and Platinum precious metals bullion. In December 2009 a gold-only fund, BMG Gold BullionFund, was launched.(PRNewswire)

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