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$1,000 Gold And Recession!

January 14, 2008

Gold surged to a historic high above $910 an ounce, as investors rushed in to buy the metal on further weakness in the dollar and expectations of a sharp cut in U.S. interest rates, analysts said. Ben Bernanke and crew will meet January 30th and expectations are a cut of at least 50 basis points. Will we see $1,000 gold soon?

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The gold rally has prompted buyers to consider other precious metals, with platinum hitting a record high, silver prices touching a 27-year peak and palladium rising to its highest level in more than two months.

Gold prices have jumped 50 percent in the past year which in terms of US$ is up $283 for the last 365 days. To put things in perspective, gold is up $115 in the last 30 days alone, or a 15 percent rise. Somewhere there has to be a correction in route to $1,000+ but it’s not seen today as gold has begun Monday up $13 an ounce.

“It’s human nature to buy into a market that is already showing strength. Most fund managers have a herd mentality and they are just attracted to gains. Gold could go higher still, but we don’t think this is a right time for buying,” said Robin Bhar, metals analyst at UBS Investment Bank. “From a technical perspective, we would obviously need to see a close above $900 that would be construed as a bullish sign. But fundamentally, we are very cautious and would not advocate going long here because positioning is still extreme.

Main line broekrs know little about gold and have had little faith in it. But, for those that bought in 5-7 years ago at the $260 level are close to seeing a 400% increase.

When We’re seeing a plummeting US$, increasing inflation, international insecurities, and more and more people talking RECESSION, what do stocks have to offer? The answer is not alot if anything as stocks started 2008 with the worst drubbing since 1932. Does anyone remember what happened then?

And who would have beliedved silver at $16.47?

Written by Ernie · Filed Under Daily Commentary 

Comments

4 Responses to “$1,000 Gold And Recession!”

  1. Black Monday! on January 21st, 2008 12:19 pm

    […] You know it happens! Stuff happens. Recessions happen! […]

  2. Golden Security! on January 28th, 2008 1:53 pm

    […] of the gate and is still staggering with triple digit losses almost every other day or so. Talk of $1,000 gold and a recession is growing as the Dow has lost more than 1,100 points so far this month and the Nasdaq more than […]

  3. Stimulus Package on February 14th, 2008 2:53 am

    […] course you do realize that this is not going to stop the recession don’t you? This is just a reminder to people that our elected politicians look after us. NOT! It’s an […]

  4. Gross Domestic Product on February 29th, 2008 2:40 am

    […] the worst starts ever. And things have not improved that much since then. And today ends February gold is just under $1,000 an ounce. That’s not a good sign- for the […]

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