Over 75 experts see $2,200/oz. average gold price ahead

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Gold's Future Bright

Over 75 experts see $2,200/oz. average gold price ahead

By David Bradshaw, Editor - Real Money Perspectives

June 17, 2009

 

Gold prices touched $1,000/oz. in 2009 as stocks fell to decade lows and sent investors rushing to safe havens. The commodity super-cycle has swept gold prices up over threefold since 2001 -- but that's just the kickoff phase say the experts.

"$1,000/oz. gold signals the world is quickly losing confidence in paper currencies, the federal government and Wall Street," says Swiss America CEO Craig R. Smith.

 

How high will gold rush?

 

So far gold prices have systematically grown about $100/oz. per year between 2003 and 2008. Gold prices averaged $300 in '03, $400 in '04, $500 in '05, $600 in '06 and $700 in '07 and $800 in '08. But today many experts are forecasting $1,000-$1,500 gold prices in 2009 on their way north of $2,000/oz.

 

"Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of 2009 as central banks flood the world's monetary system with liquidity," according to an internal client note from the US bank Citigroup.

 

"The damage caused by the financial excesses of the last quarter century was forcing the world's authorities to take steps never tried before. This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold," reports London Telegraph.

 

"When greed is finally replaced by profound fear, 'faith' in fiat money will fail, and there will be a profound flight out of all paper and digital financial instruments, and into physical gold and silver. The reason we have not yet reached $2,000 gold is because this has not yet happened. When it does, $2,000 gold may well be the last legible signpost on a road that connects normalcy with financial chaos," reports Paul Saur at Kitco.

Here's a chronological list of 75 prominent analysts and gold experts offering their perspective on where gold prices are headed in the next few years. Their combined average gold price expectation is $2,200/oz. gold! Count for yourself the dozens of good reasons for owning gold today. We've listed 20 major reasons in the conclusion.

 

2009 Forecasts

 

HOWARD KATZ, Editor, Author "The One-handed Economist"

"The Federal Reserve is lying about the nation’s money supply (M1). The current figure for money supply is being given as $1.6 trillion. The actual number is $2.34 trillion. What then can we project for the gold price at the end of the second upswing of the commodity pendulum? My previous calculation for the price of gold was $3500/oz. It might make sense to take the original $3,500 and multiply it by a factor of 4. This would give a gold price of $14,000." -Goldbug.net, 6-15-09

 

EDWARD ZORE, CEO, Northwestern Mutual Life Insurance

"Gold just seems to make sense; it’s a store of value. In the Depression, gold did very, very well. The price could double or even rise fivefold if the economy continues to weaken. Northwestern Mutual has accumulated about $400 million in gold. Gold gained 10% last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years." -Bloomberg, 6-2-09

 

JIM WILLIE,CB, PhD in Statistics, Goldenjackass.com

"The gold price follows the central banks monetization and diverse federal fiscal stimulus worldwide, and has ignored season. The only resistance will be the illegal kind from naked shorting of futures contracts by the usual villains who operate at the behest of governments, protected from prosecution. They will not be able to stop what comes. A challenge of the $1,000 level could come very soon. Once $1,000 is penetrated in clear fashion, with excitement and attention, an overshoot of $1,300 could even occur." GoldSeek, 5-22-09

 

JOHN ING, CEO, Maison Placements Canada Inc.

"Most disturbing is that the current global financial crisis has caused institutions and governments alike to violate their trust with investors. Agreements are being torn up and the Treasury Department isn't even keeping its word. With gold near $1,000 an ounce it has become the world's defacto currency. Gold has reached new highs in every major currency in the world except for the dollar and we believe it will soon achieve new highs, in dollars this time to $2,000 per ounce," reports SafeHaven, 5-5-09

 

JEFFREY RHODES, Trader, International Assets Holding Corp.

"Gold may be 'off to the races' if prices break resistance levels at $950 to $960 an ounce. Prices may surpass $1,200 an ounce this year, more than the record $1,032 reached in March 2008." -Bloomberg, 5-3-09

 

JOHN READE, UBS AG Analyst

"Gold will rise to $1,100/oz. within three months, Gold will probably continue to follow inflation expectations in the near term, although it remains vulnerable to improved risk-asset sentiment. Other central banks may also announce credit easing, and this could help sentiment toward gold." -Bloomberg, 3-23-09

 

DANIEL BREBNER, Analyst, UBS

"Gold has a potential upside of $2,500 an ounce, for a surge of 170% above current prices and a downside risk of about $500 an ounce, or less than 50%. The current environment is one which can best be characterized as having a 'low margin of error' for central bankers; with the prospects for deflation or inflation as becoming more extreme." -FT, 3-10-09

 

CHRISTOPHER WYKE, Schroders commodities product manager

"In the next 12 months a gold price of $2,000 an ounce is quite likely. If you saw the dollar resume its fall and maybe toward the end of this year, you started seeing people worried about the inflationary consequences of U.S. government policies, then gold prices could move up very sharply," -Reuters, 3-9-09

 

CHRISTOPHER WOOD, Equity strategist

"Gold is likely to more than triple from the current level to $3,500 in 2010. It’s the only form of money or credit not contaminated by the credit system - and the fact it’s still money is that central banks still own a lot of it, the global paper currency system will steadily deteriorate, eastern and central Europe will face a full-scale currency collapse, putting huge pressure on western Europe. The US is facing a deflationary collapse more severe than the crash that hobbled Japan’s economy in the 1990s, leaving gold as the only defensive play for investors." -BusIntel, 3-1-09

 

SASCHA OPEL, Publisher, Orsus Consult GmbH, (German commodities newsletter)

"I am absolutely convinced that we will not peak in 2009! I believe that the price of gold is manipulated. I believe that we will go over $1,200 by the end of 2009, but I am not sure if we can defend that level. The establishment surely will do something so that the price will not go too high in too short a time. In looking back at the rise of gold from $35 to $850 during the ‘70s, the former Fed Chairman Paul Volcker said, "It was probably a mistake to allow gold to rise so high." And Volcker now is on the Obama-Team! We will not have a peak like 1980, but gold will rise constantly. Buying on dips is the best strategy. Perhaps sometime later (in a few years, but not ‘09) gold will start to move $50 or $100 for some days in a row to $2,500 or more. Then I would sell or hedge some 'virtual' gold over the markets (futures, ETFs, short-certificates etc.), but I would not sell the physical stuff!" MineWeb, 2-28-09

 

HANS GOETTI, CIO, LGT Bank in Liechtenstein

"As governments print more money to pull the global economy out of a recession, gold may spike to $3,000 a troy ounce as a result," -CNBC, Pros Say: Gold to Spike to $3,000, 2-24-09

 

BRIAN HICKS, co-manager, U.S. Global Investors' Global Resources Fund

"Gold lagged the commodity bull market that we saw up until 2008. So it's not out of the question for gold to rise to its inflation-adjusted high ($2,200/oz.), particularly given the fact gold is a small market and there are going to be a lot of dollars with people looking to place their money in tangible assets rather than intangible assets at this point in time." -WSJ, Gold's 'Perfect Storm' Rages On, 2-23-09

 

MARTIN MURENBEELD, Dundee Wealth chief economist

RALPH ALDIS, US Global Investors precious-metal-fund comanager

"Seasoned forecaster Dundee Wealth Inc chief economist Martin Murenbeeld and US Global Investors precious-metal-fund comanager Ralph Aldis both cite the exact same long-term $2,300/oz figure, Murenbeeld explaining that the $850/oz gold-price peak of January 2008 translates into a $2,300/oz peak in today's money. Aldis says: 'In the longer term, you're talking gold as a fairly safe investment, and it wouldn't surprise me to see gold go back, on a inflation-adjusted basis, to $2,300/oz.'" -MiningWeek, 2-17-09

 

GARY DUGAN, Chief Investment Officer, Merrill Lynch

"Gold prices may hit $1,500 an ounce in the next 12 to 15 months. With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of 'the most trusted currency'. We have never seen such a rush to buy gold. It's bringing in security and it's still affordable. While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems. The greenback will decline in value by the middle of this year when people will begin to realize that President Obama's policies are not having the desired impact." -Business24-7, 2-3-09

 

2008 Forecasts

 

ROBIN GRIFFITHS, Technical Analyst, Cazenove Capital

"Gold is heading toward $1,500 in the next 12 months. Cash doesn't give you a return, at the moment not one worth having, so the negative about gold has gone away. It does traditionally preserve value both in panicky inflationary times and deflationary times." -CNBC, 12-15-08

 

PHILIP MANDUCA, Head of Investment, ECU Group

"The price of gold is set to rally to $2,000 per ounce next year as an improvement in the economic outlook causes fear of inflation and currency debasement." -CNBC, 12-3-08

 

FRANCISCO BLANCH, Analyst, Merrill Lynch

"Gold prices could hit $1,500 as global plans to rescue the financial industry are set to increase inflation pressures. The unintended consequence of the ongoing financial bailout will be a return of inflationary pressures to the commodity markets." -MW, 10-14-08

 

ROB LUTTS, President, Cabot Money Management

"The action of central bankers globally is going to do two things for investors. It will debase the value of currency; and unleash — eventually — inflation. Not next month, not next quarter, but we think inflation is coming back. With world gold production down 10% from its year 2000 peak, the precious metal will hit $1,000 over the next six months, and $2,000 over the next few years." CNBC, 10-8-08

 

PETER MAJOR, Cadiz Financial Services

"I think gold will go back to $1,000 just because the U.S. is going to have to print so much money to foot the bill for everything they want to do. They've created close to $5 trillion new debt in the last eight years. It looks like they're going to have to add another trillion in debt here real quick." -Goldseek, 9-24-08

 

MICHAEL YORBA, founder Yorba Trading Network, Yorba TV

"Why do I think crude oil is going to $300 bbl and gold is going to $3000/oz.? The real problem we face with the 'Counter Party Risk Credit Default Swap' is that we have a massive devaluation of huge block trades backing virtually all insurance and financing of big companies around the globe. The $1 trillion bailout is just a band aid on a $60 trillion problem. The US will need to raise the other $59 trillion to bail out the rest of the financial sector, which means that the US will need to sell more debt instruments. This could very well devalue the US dollar one heck of a lot more than it already has." -Yorba.TV, 9-22-08

 

JOHN HILL and GRAHAM WARK, Citibank analysts

"Frankly, we're surprised, that gold is not already at $2,000 an ounce. Gold will benefit from both the 'gloom & doom' and 'muddle-through & monetization' scenarios, possibly regaining $1,000 per ounce at year-end and even doubling or tripling in the long term," -Mineweb, 9-19-08

 

FRANK BARBERA, editor, The Gold Stock Technician Newsletter

"There’s likely to be a lot more downside pressure on the financial and monetary side and the government is going to have to pay for this. They’re going to have to print up the digital money to keep the system viable, and that means a higher cost of goods for all of us. We’ll see inflation. And that should power the precious metals to new all-time highs in 2009 and well beyond. Looking out two or three years, I’m confident we’ll see gold prices above $5,000 an ounce. I’m confident we’ll see silver prices above $100 an ounce." -Stockhouse, 8-26-08

 

IAN WILLIAMS, Charteris Treasury Portfolio Managers

"Gold is one of the biggest laggards and the one that confuses investors most. Unlike oil, copper, nickel and a host of other commodities which have seen rises of between eight and thirteen fold increases in the last ten years, gold has risen a mere three and a half times from its low. Gold would have to rise to $2,500 an ounce at present to restore the gold/oil ratio to its historic norm." -Telegraph, 7-4-08

 

RONALD STROEFERLE, International Equites Analyst, Erste Bank

"The price of gold will jump to $2,300 in the long term based on the remonetization of gold as money. Gold has been a store of value for over 3,000 years and will continue to be so for thousands of years in the future. We recommend 10-15% allocation into commodities, with the bulk invested into gold." -CNBC, 6-27-08

 

MARK LEIBOVIT, Chief Market Strategist, VRTRADER.com

"Gold is in a 20-year cycle that began in 2001. My research indicates gold will top near $2,800/oz. and may rise above $5,000/oz. which could prompt a switch back to the gold standard for the U.S." -MoneyShow 6-16-08

 

ROGER WIEGAND, Editor, Trader Tracks

"We forecast gold at a minimum price of $2,960 with a probability of much higher prices. Silver is near $17 and $50 is a sure thing with our expectations of $176 to $256 within five years. Markets ebb and flow with cycles and profit-taking. Do not be fooled with hollow selling bearish news and threats by those who prefer gold sell-off to lower prices. Gold is the only real money in the world and its rally has barely begun." -Webeatthestreet.com 6-12-08

 

RICHARD DAVIS, Fund manager, BlackRock

"There's a good chance that it may go back above $1,000 in the short- to medium-term. We're headed for inflationary times and gold has always been a safe asset to protect your wealth against inflation." -Reuters, 6-11-08

 

TONY LESIAK, Analyst, UBS

"Gold may have eased back from last week’s record high of $1,030.80 an ounce, but the yellow metal is well positioned for growth. Gold appears relatively cheap compared to oil on a historical basis, holding the potential for gold to more than double to levels where it will regain its long term average relationship." -Financial Post, 3-25-08

 

THOMAS WINMILL, Manager, Midas Fund

"There is still considerable upside left to gold, although not without a short-term correction. Gold may someday reach a peak of $2,000 an ounce. For most investors, gold should represent a 5 to 10 percent asset allocation," -MarketWatch, 3-24-08

 

ERIC SPROTT, founder and chairman, Sprott Asset Management

"Turmoil in global credit markets may lead to the collapse of a North American bank, pushing bullion prices up to $2,000 an ounce as investors seek a haven in gold. We're in a systemic financial meltdown. Government bonds are a joke at the interest they're paying. You can buy gold or other real things -- gold, silver, platinum, palladium -- things that hold value." -Bloomberg, 3-11-08

 

MICHAEL WIDMER, Analyst, Lehman Brothers

"All the newsflow coming out of the U.S. is hugely bullish for the gold market. In the end, what lower interest rates mean is that it will be difficult for the dollar to come back strongly. Inflationary pressures are something that are also playing into the market. Fundamentals are strong and I think $1,000 would not be an end. We are going to go higher from there." - The Guardian, 2-29-08

 

SEAN BRODRICK, Editor, Money and Markets

"Gold has enjoyed a great run over the past few years, but it hasn't been a straight path. But one strategy has worked time and time again: Buy the dips. It takes courage to buy when everyone else is selling. But if you do your research, you can act with confidence that even if gold dips lower than you're buying it, the upside potential is huge. My preliminary price objective for gold is $1,065 per ounce, and it could go a lot higher than that." -The Coming Gold Surge, Investors.com, 2-4-08

 

DAVID GAROFALO, CFO, Agnico-Eagle Mines

"We don't see any reason in this cycle why gold shouldn't reach its real all-time high, which is actually about $2,200 an ounce," he told reporters after a presentation in Toronto, adding the time frame of three to five years. -Reuters, 1-10-08

 

2007 Forecasts

 

OTTO SPORK, Hedge fund manager, Sextant Capital Management Inc.

"The price of the yellow metal is en route to $1,500 an ounce within the next two years. We could easily see $35 or $40 per ounce for silver over the next couple of years. We feel that certainly the junior gold and other resource stocks are nowhere reflecting their true value." -Globe&Mail, 12-4-07

 

JAMES DINES, Editor, The Dines Letter

"We would be very surprised if the gold price did not blast right through the old highs, and we reaffirm our old targets for gold of $3,000 to $5,000 an ounce (Plus silver over $100 an ounce) ... gold is not merely a colorful trinket but a monetary asset, and when mass fear strikes at the heart of paper money, the stampede to gold will be awesome." -MW, 11-5-07

 

DAVID DAVIS, Analyst, Credit Suisse

"The gold price will soar to more than $1,000 per ounce over the next five years as dwindling supply of the precious metal combines with increased demand. Upward pressure on the price of gold is being driven by the economic environment surrounding the US economy and a change in the supply and demand dynamics surrounding gold." -London Telegraph, 11-1-07

 

PAUL O’BRIEN, Analyst, Raymond James

"We believe this rally is still in its infancy with a ‘toe in the water’ ahead of the upcoming 4Q. The gains for gold can be attributed to the interest rate cut by the Federal Reserve and continued weakness for the greenback." -National Post, 9-24-07

 

AUBIE BALTIN, CFA, CTA, CFP, PhD

"When FEAR combines with full blown Greed, there is no longer any more talk of correction as prices begin to jump 5% to 10% in one day and people line up to buy bullion as signs pop up everywhere, 'WE buy and sell gold'. Once both fear and greed take over the market and the short squeezes begin in earnest, there is no way of predicting how high the high. $2,200 gold and $100 silver seems the barest minimum targets, maybe $5,000 or even $10,000." -FiendBear, 9-24-07

 

JOHN HILL, Analyst, Citigroup

"Gold appears to be entering a new investment-driven phase and has re-asserted itself as a safe haven. Gold will be one of the top beneficiaries of the 'Re-flationary Rescue,' which should bode well for hard assets and basic materials. I would not be surprised if gold were to break its all-time high of $850, or even $1,000 or higher in a new cycle of global credit creation and competitive currency devaluations." -National Post, 9-21-07

 

DONALD LUSKIN, Chief Investment Officer, Trend Macrolytics

"I've written in this column about inflation often over the last three years. I've said gold was going to $1,000. If the Fed cuts rates, then I'm going to have to admit I was wrong. Then gold isn't going to $1,000. It's going to $2,000." -Smart Money, 9-7-07

 

AMBROSE EVANS-PRITCHARD, International Business Editor, London Telegraph

"Gold will fly once investors can see that neither of the two reserve currency pillars (euro and dollar) is on a sound foundation, and once the pair are engaged in a beggar-thy-neighbor devaluation contest to stave off a slump, this would amount to a partial breakdown of the monetary system. Gold will not stop at $800. It might well go beyond $2,000." -London Telegraph, 7-23-07

 

NED W. SCHMIDT, CFA, CEBS, Schmidt Management Co.

"Monetary illusion evident in the value of paper equities versus the return on paper equities should not be ignored. Asset meltdown now taking place below the surface in mortgage related investments held by speculative hedge funds. As that happens and carnage spreads, the U.S. dollar will come under increasing selling pressure. Gold will be the investment that benefits, and continue the move to more than $1,400." -Financial Sense, 6-20-07

 

JP MORGAN CHASE & CO, Third largest U.S. bank

"Gold may rise to more than $1,000 an ounce as demand from India, China and exchange traded funds increases and production of precious metal falls." -Bloomberg 6-7-07

 

DAVID ROSENBERG, Economist, Merrill Lynch

"The current bull market for gold could last another five years, if certain conditions are in place, and the metal's price could soar to an incredible $1,500/oz. Investors should buy gold to beat the current period of stagflation." , -Platts , 4-11-07

 

JIM SINCLAIR, Author, Chairman of Tan Range JS Mineset

"Gold has no agenda, no allegiance and functions as honest money in a world of lies, corruption, overstatement and spin. $700 to $705 might well be a place certain interests will try and block gold, but their only hope is for momentary success. $761 is yanking at gold from the front with great power. $887.50, a break above $1000 and $1650 are putting their grip on the royal metal as well." JSmineset.com, 2-25-07

 

2006 Forecasts

 

LOUISE YAMADA, Managing Director, Yamada Technical Research Advisors

"Gold is the purest play against the dollar. I see gold surpassing $730 in 2007 on its way to $3,000 within a decade. Gold is probably the most straightforward investment to go with in this environment because of its consistent inverse relationship to the dollar.Other countries are trying to diversify their dollar holdings. They're buying gold and anything they can to get out of the dollar." Bloomberg, 12-11-06

 

JULIAN PHILLIPS, Analyst, GoldForecaster.com

"We would not be surprised to see $1,000-plus gold from sometime in 2007 at the earliest to 2009 at the latest. Physical demand is now being added to by the turnaround in hedge funds' change of heart to the upside. The potential oil shortage and more-than-likely ruptures in the stability of the global-money system when the dollar starts to suppurate." -Marketwatch, 11-3-06

 

DR. CLIVE ROFFEY, Elliot Wave Theory Analyst/Publisher, Gold Action

"I believe that the current correction is a more likely to be a minor before a move to well above the previous $720 peak, probably above $800. When the minor correction should occur leading to a wave five that will eventually peak well above $1,000 before we hit the next major correction." -321gold, 10-6-06.

 

HOWARD RUFF, Editor, The Ruff Times

"Gold and silver are now early in a historic bull market that will dwarf the 500-1700% profits we made in the '70s. Gold will hit at least $2,172 and $100 silver is inevitable. Investment vehicles to avoid: Stocks, bonds, fixed-return investments like utilities, REITs, residential real estate, ARMs (adjustable rate mortgages). Investment winners in bull markets: Gold, silver, copper and other base metals, uranium. The most powerful, completely essential factor affecting gold is monetary inflation. The most compelling force affecting silver today is the supply/demand equation." -Marketwatch, 8-24-06

 

DR. DAVID DAVIS, Senior Gold Analyst, Credit Suisse Standard Securities

"Between 2007 and 2010, supply-and-demand dynamics will undergo irreversible change, caused by a decline in global mine and official sector supply and increased demand from China and the investment community. We still see a gold price of $700/oz, $800/oz and $1,200/oz by 2008, 2010, and 2015 respectively." -Resource Investor, 8-4-06

 

ROBERT KIYOSAKI, Author, Lecturer, Rich Dad

"I still think gold will go to $1,500 an ounce. I'm betting against the U.S. dollar. Gold is a hedge against U.S. government mismanagement. My family members have a tradition of saving all their spare change for months on end and then trading all the coins in for a single gold coin." -Washington Post, 6-20-06

 

STEPHEN LEEB, Author, The Coming Economic Collapse

"Gold's downside is paltry compared to the upside potential. Gold could reach a price many times higher than it's at today, regardless of whether inflation or deflation becomes the problem. So we remain buyers of gold along with energy and our low-risk hedges." The Complete Investor, 6-12-06

 

HARRY SCHULTZ, Analyst, International Harry Schultz Letter

"My view has always been: current governments (which are bank-owned) won't voluntarily return to a gold standard, with its discipline on money creation. But, when the price roars to, say $1,600, they'll quite possibly be forced to do so, to appease a clamor for sound money - e.g. Bretton Woods II. The price could go to $2,000 while they debate new rules. Washington insiders would see it as their last chance to save the US dollar as a reserve currency. If they don't, the euro, yen or yuan could make a bid for that status ... If no rules are made at $1,600, gold could keep climbing till they do. Hello $3,000." -MW, 6-5-06

 

PHILLIP GOTTHEFF, President/Commodities Analyst, Equidex Inc.

"The gold market knows inflation is already here ... which helps explain the hysterical surge in prices in 2006... ETFs have expanded the metals market to now include institutional investors... With Goldman Saks forecasting $100+ oil I think we could see $1,000-1,500 gold easily... Why hoard? Because investors are afraid of paper. If we were to try to monetize our paper with gold the price would be in the $10,000/oz. - $20,000/oz. range." -CNBC "$1,000 gold debate" 5-9-06

 

CRAIG R. SMITH, Author/CEO -- Swiss America

"Gold is clearly headed toward $1,000/oz. and is still a great bargain today! Price corrections are the sure sign of a healthy bull market -- offering yet another opportunity to buy the dips in this ongoing secular bull market." -CNBC Squawk Box,4-7-06

 

PAUL MYLCHREEST, Analyst, Cheuvreux Investment

"We also see the possibility of a spike to $2,000 or higher, if the story on diminished central bank gold reserves becomes widely accepted, if central banks in countries with large US dollar holdings compete to buy gold and diversify forex reserves away from dollars, and if the U.S. economy slides into either high rates of inflation or deflation." -Mineweb, 2-6-06.

 

Additional Forecasts

 

JIM CRAMER, Founder, Thestreet.com, Host -- Mad Money, Real Money

"Gold could reach $1,000 if the Chinese stop buying our paper. Once the levee to the Treasuries breaks, the easy high ground worth gaining will be gold. Any portfolio designed to counter government-mandated inflation has to be bedrocked in gold" -New York magazine, 10-10-05

 

JAMES TURK, Founder, Goldmoney.com

"Gold is going much higher, and the $8,000 [per ounce] I mentioned a couple of years ago is probably as good a target as any. There are two aspects to what's driving the gold price: First, there is strong physical demand around the world. When gold crossed the $500-an-ounce level, people started buying gold in anticipation of monetary problems. Second, the physical demand for gold is causing a huge problem for the gold shorts. There has been a large gold carry trade in place. It is very possible gold could have a massive spike in the next six to 12 months to as high as $2,000, driven by these factors." "GOLD MINE", -Barrons, 5-29-06

 

JIM ROGERS, Author/Adventurer, Hot Commodities (former George Soros partner)

"Mr. Rogers, who foresaw the start of a commodity rally in 1999, told Bloomberg the boom in energy and raw material prices will endure, driving gold to a record $1,000 an ounce. The shortest bull market for commodities lasted 15 years, the longest 23 years, so if history is any guide, they've got a long way to go. This is not a bubble." -Bloomberg, 4-19-06

 

RICHARD RUSSELL, Editor, Dow Theory Letters

"Gold is now being accepted as the fourth currency along with the dollar, the euro and the yen. But there is a difference. Gold is also being recognized as the tangible currency and the ONLY SAFE currency. That gold pays no interest -- but is still at an 25-year high in terms of dollars -- is a testament to its value and safety in the eyes of sophisticated investors." Dowtheoryletters.com

 

J. TAYLOR, Editor, J. Taylor's Gold and Technology Stocks

"This is a different gold bull market and most bullish of all is that fact that this is still a stealth bull market. The voice of the global market is just starting to express a declining confidence in the dollar but with a coverage of only 1.7% [in U.S. gold reserves] at close to $700/oz., I believe we are still in the very early stages of a major gold bull market. We have a long, long ways to go toward $3,000 and beyond." -Howestreet.com

 

JOHN HATHAWAY, Portfolio Manager, Tocqueville Gold Fund

"Gold is in a bull-market trend, and there are a lot of reasons for that, and we will see higher prices. People shouldn't be surprised to see gold trade in the four digits." -Barrons

 

MARC FABER, Author, Tomorrow's Gold

"A vicious drop in the Dow coupled with a vicious rise in gold, possibly pushing gold to an astounding $2,000, $3,000 or even $6,000. Commodities are an asset class for the first time in history." Marketwatch.com

 

BILL BONNER, Author/Editor, Daily Reckoning

"When the price of gold goes over $1,000, the bull market will be in its bubble phase. The price may go far higher - depending on what else is going on in the economy and the markets. But this will be a time to be careful...when we stop adding to our positions and begin to reduce them. Gold is now cheap and almost hidden. People are buying it for the right reason: because it is cheap. We see signs, though, that gold is coming out of the closet and the financial press is beginning to notice." Dailyreckoning.com

 

Lord WILLIAM REES-MOGG, Author & Economist

"I expect gold to reach $1,000 an ounce in the foreseeable future. The price of gold is linked to the price of oil and to the movements of the dollar... oil is probably headed towards $100 a barrel. If there is any shooting in Iran, prices will go through the roof. That, however, is one reason for thinking that there may not be any attack on Iran. The world's oil supply cannot afford it." -MoneyWeek

 

ROBERT MCEWEN, CEO, U.S. Gold Corp.

"Gold prices may reach $2,000 an ounce by 2010 on demand for an alternative to currencies. You have much more money than there is gold, and as people see their currencies falling relative to gold, they're going to be saying `Maybe I should have some of this'." -Bloomberg

 

JOHN PERSON, President, National Futures Advisory Services

"As more and more investors start allocating more resources in gold, we could see $800 and as high as $1,000 by year's end. All the elements are in place for such a move, and it would not be unrealistic to achieve in a relatively short period of time." -Marketwatch.com

 

KEVIN KERR, Commentator/Author, Marketwatch.com

"Golden Opportunity: The case for $1,000 an ounce... If your thing is to hold the actual gold in your hand then numismatics (coins) or bullion are the way to go." -Marketwatch.com

 

JOHN EMBRY, Chief Investment Strategist, Sprott Asset Management

"A $1,000/oz gold price may be conservative." -MineWeb

 

PIERRE LASSONDE, President, Newmont Mining Corp.

"The price of bullion may exceed $1,000 (U.S.) an ounce within five to seven years as demand growth driven by Asia outstrips global supply." Globe&Mail

 

BILL MURPHY, Founder, GATA.org, Lemetropolecafe.com

"What we are seeing is the result of years and years of a gold price suppression scheme BLOWING UP! Gold is moving up because the crooks have lost control! GOLD is going to go to $3,000/oz as more geopolitical problems arise." -GoldRush21

 

ADAM HAMILTON, CPA, Zeal Intelligence

"If our current gold rally truly unfolds into a Great Gold Rally, $1,000 gold is merely the first stage. A gold bubble, which will probably ultimately happen as a way to climax the coming gold mania maybe five to seven years out, could easily launch gold above $5,000 per ounce. The actual top of a new gold bubble at the final pinnacle of another Great Gold Rally could touch $6,000+ per ounce!" -Zeallc.com

 

EMANUEL BALARIE, Senior Market Strategist, Wisdom Financial

"I think gold prices will eventually shatter even my own bullish expectations of $1,000/oz. If you have not entered the gold market, waiting for an opportune time might be too late. Keep in mind that regardless of what the media is telling you, gold is still cheap at these levels." -CNBC Squawk on the Street

 

NICK MOORE, Chief Metal Analyst, ABN Amro

"$1 000 gold is by no means an outrageous forecast. It's a cocktail of positive stimuli for gold, you get the spillover of people buying into commodities, whether its copper, aluminum, soft commodities or precious metals. People are moving there." - Fin24.com

 

PAUL VAN EEDEN, Managing Partner, Cranberry Capital LLC

"If 1979 to 1980 is anything to go by, gold prices could exceed several thousand dollars per ounce." -Bloomberg

 

JON NADLER, Investment Products Analyst, Kitco

"Gold prices actually started their life at $35 per ounce in the early 1970s. From there, it went to $850-$875 -- a twenty-five-times-over move. Gold began its latest move up at $252, so prices at $6,250 can't be ruled out either, in terms of magnitude of the move." -Marketwatch.com

CONCLUSION: 20 Reasons to Own Gold NOW!

 

1. Practicality: Gold is still by far the optimal choice for most investors

2. Protection: Likely ruptures in the stability of the U.S. dollar standard

3. Profit potential: Gold prices will eventually peak well above $2,000/oz.

4. Inflation hedge: The most powerful factor affecting gold is monetary inflation

5. Supply/Demand: 2009 gold supply/demand dynamics: irreversible changes

6. Low risk: Gold's downside risk is paltry compared to the upside potential

7. Privacy: Numismatic coins offer private ownership benefits over bullion

8. Central banks buying gold: To diversify reserves away from U.S. dollars

9. China: Chinese quietly buying gold / commodities to hedge U.S. paper

10. Secular Bull Mkt: Shortest commodity bull market 15 yrs, longest 23 yrs

11. Gold is money: Gold now accepted as 4th global currency (with $, Eu, Y.)

12. Gold going mainstream: This is still a relatively stealth gold bull market

13. Good timing: Investors should not worry about good/bad gold entry points

14. Commodities an accepted asset class: For the first time in recent history

15. Price corrections: A sure sign of a healthy bull market, buy on the dips

16. Geopolitical risks: Gold/oil prices reflect rising nuclear threat

17. Gold you hold in your hand: Numismatic coins or bullion are best

18. ETFs: Gold gaining strength from ETFs, corporate and pension money

19. No gold bubble yet: 5-7 years out could launch gold above $5,000/oz.

20. True value: Regardless of what the media says, gold offers true value

[Schatzy]

But today many experts are forecasting $1,000-$1,500 gold prices in 2009 on their way north of $2,000/oz.

 

I don't see it going over $1500 in 2009!! I think we may pass the record $1,032 reached in March 2008!!

[EZ_E]

Most of the article is hype, I think, to sell gold. However, common sense says that once confidence is lost in one's national currency, people will seek other sources to secure their wealth. No one whether a family, business or government can indefinitely continue to borrow in order to pay their debts. It can't happen--period. Lots of readers will scoff and cry sensationalism about this information but such a retort is beyond obtuse and is unreasonable to the point of absurdity.

 

The Daily Reckoning's Highlight of the Week

Baltimore, Maryland

 

 

The more things change...the more they stay the same. Unfortunately, people don't figure that out until some distance has been put between them and the situation in question.

 

Take Japan for example. For the last few years, Bill has been warning that the United States is entering a long, slow slump, ala Japan. But people refused to see the similarities...but now that they are staring us in the face, it's hard to look the other way.

 

The parallels are startling. In 1992, then-Japanese Prime Minister Miyazawa wanted to help the banking system with public funds (read: a bailout), but public sentiment was strongly against it.

 

16 years later, U.S. officials found themselves facing a credit crunch of epic proportions - and responded with the largest injection of liquidity the U.S. markets had ever seen.

 

And the parallels continue. This is why - as points out Bill, in the 'highlight of week' essay, which we have excerpted below - it is so important to always be looking in the rear-view mirror...so we aren't doomed to make the same mistakes over and over again:

 

"'In economics,' begins the Wikipedia description, 'hyperinflation is inflation that is very high or out of control... Hyperinflation is often associated with wars (or their aftermath), economic depressions, and political or social upheavals. In both classical economics and monetarism, it is always the result of the monetary authority irresponsibly borrowing money to pay all its expenses.'

 

"Who's the biggest borrower today? The United States of America. At 12% of GDP, its deficit is more than twice as large as that of France. It already owes Japan and China as much as Germany owed its former enemies in reparations - adjusted to today's money. But America's debts are far grander than those of Germany in 1923 - even relative to the size of the US economy. Where Germany owed a little over $1 trillion; America - if you include private debt, official government debt, off-budget obligations and internal commitments - owes 100 times as much. And the United States keeps borrowing more. In a single year - 2009 - it will borrow $1.3 trillion, again, just shy of the debt that sank the Weimar Republic.

 

"While the private sector during the bubble years brought U.S. debts to a record 3.7 times the entire nation's output, now it's the public sector that does the borrowing. The Obama Administration is adding to the accumulated U.S. debt at a suicidal pace - 4 times faster than the record set just last year. And America's central bank hands the borrower a loaded pistol; it is adding bank reserves - which allow the money supply to expand geometrically - at a 4,500% rate.

 

"That last number is not a typo. It's an alarm. If the Federal Reserve were a heart patient, the defibrillators would be on already. If it were a normal bank, it would be closed down immediately.

 

"But neither Karl Helferich nor Ben Bernanke set out to ruin their economies. Central bankers don't do it intentionally; they do it inevitably. Not because they want to, but because they have to. Like the Germans in the '20s, America has no politically acceptable way to pay her growing debts - except by printing more money. And now, her leading intellectuals urge her on. Cometh the hour when the feds begin to think about cutting back on their program of inflation, cometh the experts who will tell them to keep at it.

 

"The crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts," writes Nobel winning economist Paul Krugman in the New York Times this week. "Those demands should be ignored. It's much too soon to give up on policies that have...pulled us a few inches back from the abyss."

 

"'It's déjà vu all over again,' he concludes, referring to the Japanese in the '90s and the Americans in the '30s. In both cases, he thinks their economies died because they turned off the juice too soon."

 

The above is just an excerpt from Bill's standout essay from this week. You can read it in its entirety on The Daily Reckoning site

[World Colonial]

I am bullish gold longer term but expect the majority opinion to be wrong, as it almost always is. I expect gold to fall in price before it rallies substantially.

 

I also agree with the Japan analogy, except that the US is in even worse shape they they were at the same point in the cycle. Japan was a large creditor nation and had a high savings rate. This country is the largest debtor ever. I expect the aftermath of this popped bubble to be worse than theirs.

 

 

[123cents]

With the annual debt growing daily and the govt. pouring out devalued, worthless currency I see us headed for hyper-inflation. When this happens I can see all precious metal prices going through the roof.

[jackson64]

I'm curious to see how the turmoil in Iran may affect all of this..a disruption in oil supplies could be the very thing that triggers the impending inflationary period..

 

Then again, the protestors and turmoil may get silenced very quickly and this blip for democratic freedoms may be quelled before any international and economic affects are felt..

[RWB]

Over 75 experts…

 

Hmmm…..why are they so old? Do they have to be old to be “experts?”

 

Maybe there are some experts around who know about this “old expert” business?

 

[EZ_E]

Over 75 experts…

 

Hmmm…..why are they so old? Do they have to be old to be “experts?”

 

Maybe there are some experts around who know about this “old expert” business?

 

Experts are like orifices, everyone has one. And none can exactly agree. This was just a prop for sales. But the fact remains, gold will go up once people start panicking to cash in their inflated cash reserves for precious metals. When will this happen? Hell, I don't know but our economy cannot go on indefinitely the way it is. The FED was supposedly pushed through to prevent such crises, instead, it is all just a big money game with people's lives and families as pawns.

[gmarguli]

If they really believed the line of mess they're trying to sell you, they'd move all their assets into gold. If you're sure something was going up 50% of more in the next year or so, you'd be a fool not to.

[EZ_E]

If they really believed the line of mess they're trying to sell you, they'd move all their assets into gold. If you're sure something was going up 50% of more in the next year or so, you'd be a fool not to.

 

Excellent point! (thumbs u

 

It could very well deflate to $500 before it rebounds again. And, if truly devastating times do hit us, food will be worth more than gold. People were exchanging wedding bands for a loaf of bread in post WWI Germany and even more recently in an economically ravished country that I can't remember the name of. You can't eat gold but it can sure make some purdy teeth.

[RareSov]

Actually no, because you have to buy on dips to be profitable

 

In the long term, gold has often not moved (seemingly 0 profit) over periods as big as 20 years if not more

 

Buying on a dip is the obvious way to offset the up and down trend in your advantage. Right now is a dip I feel, and the USD is falling. Gold price will go up in USD no doubt. What matters to me is gold price in MY currency. It has actually fallen recently, as the AUD is much stronger vs the USD

 

Want a grip on how much money the US owes and is spending ? www.usdebtclock.org

[RareSov]

If money supply is apparently only a couple of trillion... and the total is 642 trillion in currency and credit derivatives.. ? can someone attempt to explain derivatives if we have someone that smart ? The politicians reckon derivatives are too complicated for even most smart people to understand (nice way to hide spending)

 

To me derivatives is just some financial mumbo jumbo that allows them to print bonds.. a hell of a lot of them.

[physics-fan3.14]

[World Colonial]

If money supply is apparently only a couple of trillion... and the total is 642 trillion in currency and credit derivatives.. ? can someone attempt to explain derivatives if we have someone that smart ? The politicians reckon derivatives are too complicated for even most smart people to understand (nice way to hide spending)

 

To me derivatives is just some financial mumbo jumbo that allows them to print bonds.. a hell of a lot of them.

 

The notional value of outstanding derivative contracts is not particularly meaningful except in the sense that the greater the amount, the greater the likely net exposure by one of the counterparties will be and that is what matters.

 

To my knowledge, no one knows what the exposure amount is at any given point in time. (Obviously, it nets to zero but if someone cannot pay like AIG last year, that can trigger a chain of bankruptcies and bring the entire financial system down as would have happened last year without the government bailouts.) All we can know is that the total amount must be added to the amount of debt to obtain a comprehensive picture of the outstanding claims in the financial system.

 

Reportedly, there were $1 trillion of credit default swaps outstanding on GM debt. If that sounds ridiculous, it is because it is far more than the market value of both GM stock (now essentially zero) and publictly traded debt.

 

Whether that number is correct or not, I do not know because I have no idea where that number came from. And though GM's bankruptcy should have been a covered event to require settlement, I have not heard of any large losses related to it.

[michael]

yes........... gold is going to go

 

MUCH HIGHER

[RareSov]

I think it is, I think I should buy some as the only gold I have is coins

 

What I am really happy about is the high price of sovereigns now.. any passable **** can fetch much higher price than 2 years ago, even 1 year

 

I sold too many, but have a fair few including about an oz in gold in 4x 2005 sov sets with books slabbed PF70 UC they will just keep going up

[just-john]

The price of gold doesn't matter if the prices of everything else goes up the same%. When something has that many people pushing it or hawking it pushing it .Makes me wonder why are they trying to help me or do they just want to get in my pocket .Think the price of my 1984 Honda CRX that gets about 50MPG will out pace the price of GOLD when gas goes back to 5 to 6 buck a gal.My class 2 weapons have alway out paced gold pricesby far .

[Conder101]

And in March of 2008 when it first went over $1000, all the "experts" were predicting that it would be over $2000 by the end of the year. It ended around $800.

[steph1942-migration]

The dollar goes down, gold goes up (let's include silver and platinum). Problem being, I've been putting away metal for a rainy day but I've more to lose than gain. I'd rather have a strong dollar than a smaller sum in the metals. Yet, those "experts" can't convince me enough to dump most of my assets into a market that is so volatile in the short term.