VistaGen Therapeutics, Inc. Gold Outlook for Last Quarter of 2011

Gold Prices rose over $100 an ounce during the third-quarter, settling at $1,622.30. The 6.5% gain was no easy ride for investors who saw prices north of $1900 just last month. The turbulence has refueled debate over the precious metal's stature as a safe haven investment, with many viewing the September 10% sell-off as a sign the bubble burst. Alix Steel, reporter covering the metals beat for TheStreet.com, couldn't disagree more.

"Prices are broken, you definitely can see that, but I don't think the bubble has burst here," she says. Steel points out that the most recent rally in gold has spanned over two-years, and the last two-months alone have seen prices jump over $300 an ounce. "Prices have a right to come off," she says, expecting volatility to persist in the fourth quarter.

"I don't think we're going to see a huge rally right off the bat. I think we're going to have a period of consolidation," she says. However, her ear is to the wall on the gold trade and she's still hearing calls from traders that have gold rebounding by year-end up to levels between $1,800 - $2,000 an ounce.

Steel explained that demand driving the precious metal higher is not Western centric. Here, we see gold action influenced more by technical levels, whereby a consolidation move could be easily fueled into a major correction or crash. But what's easily forgotten is the strength in Asian demand. "India could be importing a thousand tons of gold this year," says Steel. As her sources explain, there's rampant buying there sending premiums up "gangbusters." And of course there's China, a key demand player that has gone from net neutral to a positive demand effect of 300 tons per years according the World Gold Council. China accounted for 6% of total global demand in 2000 and rose to 18% in 2010.

Two more catalysts in Steel's bullish view are central bank buying and negative real interest rates. According to the World Gold Council, central banks imported 198.4 tons of gold in the first half of 2011 versus two years ago, they were selling 450 tons a year.

Of course, any gold outlook that doesn't address currency would be remiss. As Europe continues to sort through its debt crisis, we'll likely see more currency fluctuations. The more instability in the EU, the faster the flight to safety into the US dollar becomes.

"We saw the Euro basically start to collapse… and yet investors fled to the dollar of all things, which the gold bugs say shouldn't happen," says Breakout's Jeff Macke. Macke, who exited his gold position in the (GLD) in August explains, "shouldn't, wouldn't, couldn't are bad words in investing, because what happened was people buying treasuries, people buying the dollar which has been strong even as gold collapsed."

For long-term investors, the moves we've seen recently still don't deter the fundamentals, according to Steel. She believes the recent gold trade was a margin call story, not a fundamental change, making gold prices much more attractive for Q4 than they were two weeks ago. As for what to look for before you buy into the gold weakness, Steel says "you want a steady rise. Once you see a steady rise start to happen in a more methodical way, that's a safer place to buy rather than just a spike up."

Investors Support Obama's
Buffett Rule

Surprisingly, global investors have overwhelmingly given their support to President Barack Obama's proposed tax increase for those earning annual incomes of $1 million or more in an effort to reduce the deficit.

By a margin of 63 percent to 32 percent, respondents in a Bloomberg Global Poll approved of the president's proposal, known as the "Buffett rule" in a nod to Warren Buffett, the chairman of Berkshire Hathaway Inc., who has said it is wrong that he pays a smaller share of his income in taxes than does his secretary.

Obama said Sept. 19 that making sure that the wealthy pay at least the same tax rate as the middle class was "just the right thing to do." House Speaker John Boehner accused the president of practicing "class warfare," saying any new tax would hurt job creation and Buffett's situation was not typical.

The call for the rich to pay more, however, found backing among financial professionals in the quarterly Global Poll of 1,031 investors, analysts and traders who are Bloomberg subscribers. "Higher tax payments could help to avoid or delay potential social disturbances and in addition create some kind of a general solidarity," says Henry Littig, chief executive officer of Henry Littig Global Investments AG in Cologne, Germany, a poll respondent.

Support for the millionaire's tax was highest in Europe, where French President Nicolas Sarkozy plans a 3 percent surcharge on incomes above 500,000 euros ($680,000.) European poll respondents backed Obama 78 percent to 17 percent; Bloomberg customers in Asia supported the president's idea 69 percent to 21 percent.

"Increasing taxes on millionaires may not harm the economy, but it will not help it either," said Don Lindsey, chief investment officer at George Washington University, who participated in the survey. "What we need is a complete overhaul of the tax system."

In a New York Times op-ed last month, Buffett wrote that his federal income tax bill was $6.94 million, or 17.4 percent of his taxable income -- a lower rate than any of the other 20 employees in his Omaha, Nebraska, office.

Buffett said the "ultra-wealthy" should pay a new minimum tax, without any change in tax rates on income or capital gains. "An athlete making $10 million -- he would not have a change in his tax rate at all or $20 million or $30 million even," Buffett said. "But somebody that buys a stock index future and sells it 10 seconds later and gets 60 percent by long-term gains, he would have a different world to live in."

The debate over a "Buffett rule" tax caps an era in which disproportionate rewards have gone to those at the top of the nation's income distribution. Between 1993 and 2008, the top 1 percent of families captured 52 percent of total income gains, according to a 2010 paper by economist Emmanuel Saez of the University of California, Berkeley.

The administration has said it has no plans to submit a detailed millionaires' tax proposal to Congress. For now, that means the main significance of the Buffett rule is political not financial.

The proposed tax is the rhetorical centerpiece of White House jockeying in the run-up to the deliberations of a congressional "supercommittee" seeking $1.5 trillion in deficit reduction by Nov. 23.

VistaGen Therapeutics, Inc. (VSTA) Announces Expansion of Key Stem Cell Technology Patent Estate

VistaGen Therapeutics, Inc. was pleased to announce the issuance of two additional United States patents supporting its therapeutic and drug discovery programs.

U.S. Patent 7,763,466, titled "Mesoderm and Definitive Endoderm Cell Populations," and U.S. Patent 7,955,849, titled "Method of Enriching a Mammalian Cell Population for Mesoderm Cells," further enhance VistaGen's intellectual property portfolio and provide additional protection for its proprietary research and development activities. Methods covered in these important new U.S. patents describe the use of activin and serum-free culture conditions for producing endoderm and mesoderm.

"Strong and enforceable intellectual property rights are critical components of our plan to optimize the commercial potential of our Human Clinical Trials in a Test Tube™ platform," said Shawn K. Singh, VistaGen's Chief Executive Officer. "These patents further solidify our growing IP portfolio. Generally speaking, they expand the application of our activin-driven pluripotent stem cell differentiation technology to include a broader range of tissues and organ systems, and significantly strengthen our market position."

Mesoderm and endoderm are two of the three primary early precursors, "germ layers," which develop into all of the non-neuronal cells of the body. Endoderm is the innermost of the three primary developmental germ layers, and develops into the gastrointestinal tract, including the major cells of the liver and pancreas, respiratory tracts of the lungs, other endocrine glands and organs, such as the thyroid and thymus glands, the major cells of the kidney and the auditory and urinary systems. Mesoderm is the germ layer lying adjacent to the endoderm. These multi-potential cells develop into cardiac and skeletal muscles, all the cells of blood and lymphatic systems, bone, cartilage, fat, the lining of blood vessels, and connective tissues.

Activins are members of the important transforming growth factor beta (TGF-beta) family of "morphogens," i.e. developmental factors that direct and control the differentiation and eventual fate of early precursor cells. During development, the body uses differing concentrations of morphogens, similar to activin, to direct precursors to become the various mature cells discussed above. Methods utilizing differing concentrations of activin to direct and control the differentiation of various mature cell types are described in these issued U.S. patents and are widely-believed as having significant commercial value.

In addition to the patent estate that VistaGen owns and controls by license in the U.S., the Company has proprietary rights to a large and growing number of patents granted in territories outside the U.S. Having recently reported its original research demonstrating the use of pluripotent stem cells to generate insulin, these issued U.S. patents further highlight VistaGen's leadership position in the field as the Company applies its Human Clinical Trials in a Test Tube™ platform for proprietary applications in drug rescue, cell therapy and regenerative medicine.

The patent families related to these two issued patents are subject to exclusive licenses to VistaGen on a worldwide basis through an agreement with Mount Sinai School of Medicine (MSSM) in New York. The patents stem from work conducted by scientists in the laboratory of Dr. Gordon Keller, formerly a Professor of Gene and Cell Medicine at MSSM and Director of its Black Family Stem Cell Institute. Dr. Keller is now Director of the University Health Network's McEwen Centre for Regenerative Medicine in Toronto and Chairman of VistaGen's Scientific Advisory Board.