GOLD AT $5,000 AN OUNCE?

by Goldline.com | August 20, 2010

Gold is consolidating on the New York Spot Market as of 10:12 a.m. EST as the dollar strengthened and investors took profits to cover losses heading into the weekend. However, any news the U.S. economy is slowing could trigger another wave of safe-haven buying. Also recent price dips in gold have been met with bargain hunting as traders look to buy gold at "discount" prices. (The Street, 8/20/10)

U.S. stocks opened lower Friday as investors continue to brace for a slower economic recovery. "Investors remain on edge over the direction of the economy," said Peter Cardillo, chief market economist at Avalon Partners. "Recent economic reports, especially employment data, continue to be a worry for the market and overshadow the good news, including the expansion of corporate America." While takeover activity and merger deals are picking up steam, a sign that companies are preparing for "better times," Cardillo said the market is still debating whether the economy is headed for a double-dip recession. (CNN Money, 8/20/10)

Marvin R Clark, Managing Principal and Chief Economist and Strategist for Monsoon Wealth Management, LLC, laid out the case for continuing to invest in gold in an article for Seeking Alpha Friday. Clark cites lack of confidence in fiat currencies, a potential downgrade to the U.S. credit rating, and financial insolvency as being the key drivers for a potential rally in the price of gold to $5,000 an ounce. How high will the price of gold go? According to Clark, “The inflation-adjusted price today for gold is more than $2,200 an oz. There are models with gold reaching $5,000, $6,000, and $8,500 dollars an oz. One outlier has gold pegged at $36,000 per oz. Pick a number. How much debasement will the dollar experience over the next five years; 5%, 10%, 25%? Will the dollar still exist in five years?” (Seeking Alpha, 8/20/10)

†
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. You should review Goldline's Account and Storage Agreement along with our risk disclosure booklet, Coin Facts for Investors and Collectors to Consider ®, prior to making your purchase. Goldline's spread, which is the difference between the price we sell our products and the price we buy them back, generally ranges between 5% to 20% on our most common bullion products and 30% to 35% on all other products including our popular European francs, proof coins, silver dollars and half-dollars, and graded coins. The market must go up enough to overcome this spread before an actual profit is achieved. Precious metals and rare coins can increase or decrease in value.
Past performance does not guarantee future results. Coins are a long-term, three- to five-year, preferably five- to ten-year investment. We believe precious metals are suitable for 5% to 20% of the average investment portfolio though others may recommend a different percentage. To receive free information package on gold and precious metals investing, call Goldline at 1-877-341-2646.

S&P Capital IQ - Gold: $1,900 (in 2012) "Leo Larkin, metals and mining analyst at S&P Capital IQ, thinks that $1,900 gold might not be that much of a stretch [in 2012]. 'Gold has been ..."
Citigroup - Gold: $2,300 - $2,400 (by end of 2012) "While we remain cautious on Gold in the near term...we continue to believe that the bull market remains intact...we believe that 2012 may be..."
Leeb Capital Management - Gold: $2,500 - $3,000 (in 2012) "I'll give you my target for gold at the end of 2012, it's going to be trading somewhere between $2,500 and $3,000. This..."
Global Hunter Securities - Gold: $1,800 (in 2012) "'What I am looking for is a gold price of $1,800 an ounce in 2012,' says Jeffrey Wright, senior research analyst at Global Hunter..."
US Global Investors - Gold: $3,600 (by 2017) "'People get so caught up with the next three minutes for gold and they should really be focused on the next three years,' says Frank Holmes, ..."
Goldman Sachs - Gold: over $1,900 (in 2012) "Wall Street investment bank Goldman Sachs predicts that gold's bull run will continue into 2012 with a low interest rate environment and..."
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..."
Nomura - Gold: $2,000 (by end of 2012) "Nomura has raised its forecast for gold prices to $2,000 an ounce by the end of 2012, from $1,800 earlier. The brokerage said the low-interest rate..."
Morgan Stanley - Gold: $2,200 (in first half of 2012) "Gold will lead a rally in commodities in 2012 as Europe's sovereign-debt crisis continues to roil financial markets, spurring demand for ..."
UBS - Gold: $2,050 average in 2012 "[Gold] remains one of the top commodity picks for 2012 as 'most of the factors that pushed gold higher in 2011 are not going away,' according to UBS..."
Bank of America Merrill Lynch - Gold: $2,150 - $2,200 (average in 2012) "From a technical perspective we believe that the bull trend for gold remains intact… with gold having not yet met any of..."
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..."