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These are stories Report on Business is following Thursday, Feb. 21, 2013.

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Is the gold rush over?
The "glorious run" in the price of gold is ending, economists at CIBC World Markets warn today.

"Gold will have its day in the sun at other points down the road, but the clouds on the horizon could portend still lower gold prices over the next couple of years," Avery Shenfeld and Emanuella Enenajor says in a report titled "Why gold's lustre will fade."

Noting the surge of almost 500 per cent since 2002, they now project gold will dip to average $1,500 (U.S.) an ounce by 2014.

"It 's been a glorious run," they say.

"But already, many of the forces that made the yellow metal so attractive look to be turning over, and expectations for other supportive factors are overdone."

The CIBC economists note that gold prices are traditionally supported by fears of inflation, either that alone or in combination with worries of currency devaluation.

But, they say, there's no threat of inflation on the horizon, in the U.S. and elsewhere, through there are concerns.

"In no small measure, the fear is rooted in a fundamental misread of monetary policy, particularly that of the U.S. Federal Reserve," they say in their report.

"Investors have piled into gold in fear of the consequences of an unprecedented build in the balance sheets of the three largest developed economy central banks."

They're referring to stimulus programs launched by the Fed, the European Central Bank and the Bank of Japan, schemes aimed at bolstering the post-crisis, still stagnant economy.

"The myth is that these central banks, particularly the Fed, have been printing money with wild abandon, making inflation an inevitable final chapter to the story, and favouring gold as a hedge against that loss of purchasing power," they say.

"A myth because, in reality, money growth has not been particularly brisk."

The other concern is that of a tumbling U.S. dollar, given that the Fed's quantitative easing program, an asset-buying scheme, is negative for the greenback.

Indeed, the U.S. currency has dropped, though from an "egregiously overvalued level" given the fundamentals, say Mr. Shenfeld and Ms. Enenajor.

But the Fed program – the latest round is known as QE3 – may well end before the end of this year. Minutes from the latest Fed meeting hinted at this again just yesterday.

Gold has received a bit of a push from central banks that have been buying bullion, but "the elephant in the room" is the surge in gold exchange traded funds, which are huge.

But over the next couple of years, the Fed will rein in its asset buying, and economic fortunes will improve.

"We're not expecting a huge torrent of selling over our two-year forecast horizon," they say.

"The gold bugs will need more convincing that the Fed and other central banks will keep inflation under wraps as the economy recovers, and we will be a long way from full capacity in the U.S. or elsewhere as 2014 comes to a close. But a continued slide to $1,500 an ounce would still mean that gold will underperform equities as an asset class over that two-year period."

Bombardier profit slumps
Bombardier Inc.'s profit fell 93 per cent in the fourth quarter as the plane and train maker booked a $119-million (U.S.) restructuring charge, The Globe and Mail's Bertrand Marotte reports.

The Montreal-based company earned $14-million, or nothing per share, compared with $214-million or 12 cents a year earlier.

Revenue increased to $4.8-billion from $4.3-billion, Bombardier said today.

"Our results for 2012 are not reflective of our potential," said chief executive officer Pierre Beaudoin.

"After proving our resilience throughout the economic crisis, today, Bombardier is at a turning point. With our outstanding backlog of $66.6-billion, an increase of 19 per cent over last year, we're forging ahead with breakthrough products and expanding our reach in pivotal growth markets."

Rona restructures
The home improvement chain that Quebec would like to think is a strategic asset is getting, well, strategic.

Rona Inc. announced today that it's dumping 200 managers, or 15 per cent of its administrative staff. That comes amid fourth-quarter results that "fell short of our expectations," The Globe and Mail's Sophie Cousineau reports.

Sales in the fourth quarter reached $1.2-billion, a 2.2-per-cent increase over 2011.

But that's largely due to an extra week and the opening of new stores. Sales at stores that have been opened for more than a year, a key metric in retailing, were down 0.7 per cent when the additional week is excluded. Distribution sales were up 5.2 per cent by that same measure.

Tim Hortons hikes dividend
Tim Hortons Inc. says it's still looking for a new CEO, but it rewarded shareholders today with an increase in its quarterly dividend of 23.8 per cent.

As The Globe and Mail's Bertrand Marotte reports, Tim Hortons earned $100.3-million or 65 cents a share in the fourth quarter, compared to $103-million or 65 cents a year earlier.

Revenue climbed to $811.6-million from $779.8-million.

The quarterly dividend rises to 26 cents from 21 cents.

The company also said it expects to appoint a new chief executive officer by the early summer.

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