GOLD Crosses $600 Per Ounce!
How high will the price of GOLD rise before YOU consider buying some?
KENTROVERSY COMMENT: Now that gold has now hit the $600 per ounce mark in after-hours trading, it is a fitting time for me to once again explain to you that there is an INVERSE RELATIONSHIP between GOLD and paper currency, which is created out of THIN AIR, and is backed by NOTHING. So, what you can expect to see, is possibly $700 per ounce by the end of the year.
You can laugh, but at least buy some GOLD and SILVER.
Gold hits $600. Now what?
Traders say investment shift sets up $1,000 price by 2010
By Myra P. Saefong, MarketWatch
Last Update: 5:17 PM ET Apr 6, 2006
SAN FRANCISCO (MarketWatch) -- Gold has reached $600 an ounce for the first time since 1981 but the real surprise will be where it goes from here, with experts predicting a drop in the near term that could clear the way for four-digit prices in the next few years.
"Gold at $600 an ounce might be a surprise to many, but these are the same people that were surprised when gold hit $300, when it broke $400 and when it moved to over $500," said Emanuel Balarie, a senior market strategist at Wisdom Financial.
"Most likely, they will still be surprised when gold hits $1,000 an ounce," which could come in the next three to four years, if not sooner, he said.
Gold futures for May delivery climbed as high as $601.90 in electronic trading early Thursday in New York, and peaked at $600 in the regular session. The contract closed at $599.70, up $7.20.
The strength helped lift silver futures above $12 an ounce for the first time in more than 22 years. See Metals Stocks.
It's no secret that gold's garnered increased attention for at least the past year. Gold futures were trading around $429 a year ago.
The sector has seen a growing number of new gold-market players, with exchange-traded funds having the potential to take up the amount of supply made available as the price rises, said Julian Phillips, an analyst at GoldForecaster.com.
That, combined with the fact that supply is not growing at nearly the pace of demand, has been a major contributor to gold's climb, he said.
But "there are many driving forces in the gold market, not just one singular event," said Peter Spina, an analyst at GoldSeek.com.
The U.S. dollar will take center stage this year, and the "paper currency world" will itself be questioned, said Phillips. And as a "longer-term thermometer, what happens to global confidence, and the ability of the major structures of the monetary world to measure true financial values, affects gold," he said.
Against this backdrop, gold is seen as a safe-haven investment.
"The typical investor has yet to discover the attractiveness of this asset --- the gold price is just starting to reflect this move as investment dollars flow in," said Spina. Phillips compared the state of the global economy to a dinner party with too many guests.
"Like a dinner party host serving for 10 people, what does he do when 20 come to eat?" he said.
"As uncertainty grows in the global-money world, the impact on gold is greater because new buyers of gold now include increased buying by present holders, creating a 'shunt-effect' on demand as it hits supply," Phillips said.
Not so frantic
Contrary to some market beliefs, gold is "not in a frantic market, a cornered market, or a hysterical buying binge," said Thomas Hartmann, an analyst at Altavest Worldwide Trading.
The market is simply "facing shifting values," he said.
Gold prices have moved up in a steady manner over the last several years," said Balarie. And along the way, "periods of pullbacks and consolidations, have allowed prices to continually reach new highs."
Some concerns over the past three weeks have provided "some cautious bubbling bullish energy," said Hartmann.
Iran is pricing their oil in euros and China's "spreading the word that it's likely to stop purchasing U.S. dollars and other dollar-denominated assets," he said.
Overall, "paper currency is not favored right now -- which shifts demand towards gold," he said.
Still, the dollar has been the "stalwart of the global economy and it won't disappear overnight, nor should we believe that gold will suddenly be sitting atop the mountain," said Hartmann.
"It will be a steady climb as the market consolidates and advances to new highs," he said.
From here, gold prices will likely rise to $620 an ounce, said Balarie, but from there the picture may -- at least temporarily -- become a bit hazy.
The per-ounce price of $650 gold "could be around the corner if some economic or fundamental news breaks anytime," said Kevin Kerr, trader and editor of Global Resources Trader, a newsletter service by MarketWatch, the publisher of this report.
Balarie expects the market to see profit-taking and consolidation at around the $620 level. Spina said prices could pull back to $575 after trading in the range of $600 to $625.
Indeed, "there are some worrying signs to me in the short term," said Brian Batt, a managing member at Brick Capital Partners, pointing out that the "gold stock/price of gold ratio is dropping."
"The gold shares are acting weaker than the gold price, where they usually give an investor two to three times leverage to the gold price," he said. "This type of action has preceded previous corrections in the sector."
So, "this is a time to be booking some profits," he concluded.
But following a near-term retreat, Spina sees $650 to $700 then "onwards to over $800 ($825-$875)" within two years.
If the move to $620 occurs in a relatively quick manner, Balarie predicts that gold prices will close above $700 before the end of the year.
Further out is Balarie's prediction of $1,000 gold in maybe three or four years.
But gold's rally won't likely stop there, according to John Stafford, editor of Stafford's Investment Strategy Letter, who expects gold to "peak on this cycle" in 2020.
"This is just the beginning of a gold move to $4,000-plus by 2042 -- when Social Security is 'scheduled' to go bankrupt," he said.
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The following source was used in the creation of this Kentroversy Paper . . .
Gold Hits $600. Now What? (April 6, 2006)