
GOLD CLIMBS TO FIVE-MONTH HIGH AS MONEY ALTERNATIVE
After hitting an all time high early Tuesday morning, Gold has weakened throughout the day. Gold hit a five-month high in New York Tuesday on signs of increased demand for the metal as an alternative paper currencies.
Traditionally, gold has moved inversely to the dollar; however, recent concerns over the Greek sovereign debt crisis are stirring fears among investors about all fiat monies. Warren Buffet spoke to this concern last weekend, telling investors he's bearish about the ability of all currencies to hold their value over time because of massive deficits being run up by governments in the wake of the global financial crisis.
Stocks are down across the board on Tuesday as concerns intensified over Greece and the ballooning European national debts. According to an article in today's Marketwatch, "At this point, the situation has developed from a mere Greece-crisis into a full blown euro-zone sovereign crisis." (Marketwatch 5/4/10)
President Obama said in a speech to business leaders Tuesday that the past two years of recession have been "difficult," but "the storm is receding." Judging by the volatility in the markets today, investors seem less confident.
Dow Theory's Richard Russell hints in his letter of May 3 that we may be seeing heightened concerns over all paper currencies in the near future. According to Russell, "What we are seeing is the slow, steady decline of the greatest fraud ever perpetrated on the people of the world. The fraud I am referring to is fiat money. This is the so-called "money" created by the central banks. Fiat (non-intrinsic) money can be created at will by a central bank via a computer." (Dow Theory, 5/3/10)
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- 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..."









