Will Gold Pass $1,000 an Ounce Next Week?
Source: GoldSeek, Peter Cooper (5/25/09)
". . .gold will make it past and stay past $1,000 on its third attempt. . ."
Traders are pointing to overbought signals and cautioning that the market could pull back. But a peak price on Friday of $961 left gold just a tantalizing $39 below the $1,000 barrier.
Market gurus like Jim Sinclair have noted. . .gold will make it past and stay past $1,000 on its third attempt – that is where we sit today.
A glance at the gold chart indicates that the precious metal is not so much getting ahead of itself – it is merely back on trend in this bull market.
The fundamentals could scarcely be better. The fear of inflation and dollar devaluation is driving this rise in price, and the sudden slump in the value of the U.S. dollar last week is the immediate cause of this price spike.
Last week, we saw equities falling and the U.S. dollar and bonds. The only show in town was precious metals. Could this be a new pattern?
Gold traders are looking to past performance and the usual soft summer patch for prices. But we have been through a global financial crisis, which is still ongoing, since last summer and this pattern may have changed as a consequence.
Gold and silver have just broken out on the upside and there is good reason to think we could be close to a parabolic ascent for precious metals.
More sophisticated investors will now look quickly for ways to gear up into the gold rush. Gold stocks outperformed the metal last week, and should provide positive gearing, even in a falling stock market. Silver is a way to lever gold prices and has also continued to outperform the yellow metal.
Marc Faber has said investors should also start looking at the junior exploration stocks, and there is much value to be had in the holders of gold and silver claims. The value of claims – actually good and bad ones – is even more leveraged against the gold price than silver.