Gold To Hit $1,100 - GFMS
by Joe Battaglia
Posted: April 9, 2008
Gold is up $4 and
silver is up $.30 in early trading as the dollar is down 9 basis points at
72.14. Oil is also firmer awaiting the
inventory data, up $.50 at $108.98 a barrel.
The weaker dollar helped gold to bounce upward as investors continue to
believe the Fed will cut rates again at the end of this month. The rate cut may not be terribly
aggressive. It may only be ¼%. However, they will probably do that even
though their minutes seem to indicate they are coming to a point where they
think further interest rate cuts may not do much good for the economy. Many analysts are saying the government is
going to have to adopt aggressive bailout programs to support the homeowners
and the lending institutions. This of
course would be extremely inflationary.
The analysts are telling Dow Jones Wire Service that, "The overall
environment remains positive for gold, given a raft of supportive external factors
such as dollar weakness, and inflationary concerns, so safe haven buying should
continue to underpin prices, says Barcap."
Gold continues to
work off its overbought condition on the charts with a high-level
consolidation. This is the type of activity
we have seen throughout the course of the seven-year bull market. I think high-level consolidations are very
positive signals for the market. They
demonstrate there is excellent underlying support, and the path of least
resistance is to higher levels. We
should see the gold market begin to rally as the Indian wedding season gets
underway. In India and China the
springtime wedding season gives rise to a significant increase in demand for
gold as wedding gifts. Gold Fields
Mineral Services said there is a significant increase in the demand for gold in
the Middle East. The enormous oil
revenues and profits that have been earned in that region are likely to
continue to fuel extraordinary demand for gold. Gold Fields Mineral Services today said gold prices are expected
to hit new record highs this year. The
Dow Jones Wire Service said, "Many of the drivers behind gold's push to record
highs hit in mid-March remain in place and could see the metal hit $1,100 a
troy ounce this year, said Philip Klapwijk, Chairman of GFMS at the launch of
its gold survey 2008.
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