
ANALYSTS SEE $1,200 GOLD BY YEAR-END
Gold is down about $1 in early trading, while platinum and palladium are up. Silver is down $.18 in quiet dealings. Oil is also down $.85 and the equity market is slightly higher. Dow Jones Wire Service said gold traders are simply eyeing the movements in the dollar. The correction in the metals comes as the dollar rebounds from its lows. After a week where gold hit new record highs on an almost daily basis and after the substantial gains that we've seen over the past month, a correction is normal. Analysts however, have not changed their view that by year-end gold will likely trade at about $1,200 an ounce. Next year analysts look towards anywhere from $1,300 to $1,500 as reasonable targets.
A BofA/Merrill Lynch analyst said today that they maintain their $1,500 an ounce target. They sited the fact that emerging market central banks continue to turn to gold and away from G10 government paper to diversify their reserves. Clearly,there is a movement away from developed market currencies as reserve assets. This is being helped to some degree by the fact that China's currency is gradually becoming a reserve asset in its own right. In addition, the movement to replace the dollar as the sole reserve currency is gaining momentum. One analyst said to the Dow Wire Service, "Given the underlying bull strength in this market, room exists for further gains into record territory towards $1,150, and an equality move off the April 2009 bull pennant low at $865 highlights the $1,188.40 area",said Frances Bray, Dow Jones Chief Technical Analyst for Europe.
Given this strongmovement away from dollars by central banks and the expectation of higher inflation rates ahead due to the fiscal and monetary stimulus in the G10 countries, it is reasonable to assume that gold will make new record highs over the coming year. That is why many investors are adding gold to their holdings. This week we have seen reports that traditional stock mutual funds have been adding gold to their portfolios as a method to diversify and balance the portfolios. Others are doing the same,with hedge funds such as Paulsen's fund and Einhorn's Green Light Capital doing the same.
Given the fact that these folks are extremely successful investors, we should all be accumulating gold at these levels. Moreover, the fact that the government of India purchased 200 tons of gold at an average of $1,045 suggests that that is a floor under the price of gold reducing risk to today's investors. Barrick Gold also announcing that it is closing out the remaining 1.9 million ounces of its hedge book before September next year, adding further support to this market. It confirms their view that gold prices are headed dramatically higher.
If you would like to follow the lead of these very wise and successful investors, you should call Goldline at 1-877-341-2646 to get started. Ask them to provide you with the free information package on investing in gold, which you will find very helpful. Call Goldline at 1-877-341-2646 to receive the free information package or to acquire gold and silver assets.
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To receive the free information package on gold investing, call Goldline at 1-877-341-2646. You will also receive the Client Account Agreement, a company brochure and a Coin Facts Risk Disclosure booklet. Read these carefully before you make a purchase. Call Goldline at 1-877-341-2646 now to receive your free gold information package.
†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.
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- CNBC - Gold: $2,400 (no period given) "Gold will top $2,400 an ounce. The long-term bull market in gold marches on. Gold won't make a straight shot to a new inflation-adjusted high. As long..."
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- TheStreet.com - Gold: $2,500 (by May 2013) "I want to own gold here. I think gold is going to $2,500 eighteen months from now... Gold has been up for ten straight years and this going to be the..."


