Watch for $10,000 Gold
Don't be surprised to hear speculation for $10,000 gold...
Maybe it seems a little over the top right now. Gold has yet to break $2,000. But if you look at the state of the monetary system, you have to admit nothing is certain.
The Federal Reserve just announced a third round of quantitative easing. We knew they would, but that doesn't change the nature of it: they're devaluing our currency.
National debt also just went past $16 trillion. When little seems stable with our currency, investors turn to commodities. Gold has long been a safe haven.
Of course, with this unlimited quantitative easing, the Fed also runs the risk of raising inflation. An attempt to keep interest rates low could send inflation pretty high.
Jim McTague of Barron's talked with Scott Minerd, chief investment officer of Guggenheim Partners:
In extreme circumstances – like miscalculations regarding inflation by the Federal Reserve – the metal [gold] could hit $10,000 per troy ounce, he asserts. Thursday, after the Fed disclosed its latest financial-stimulus scheme, the metal rose about 2% to $1,768.
Would anyone really be surprised by an inflation miscalculation by the Fed? People are going to be investing in gold – something that will hold in value even when the dollar doesn't.
From Business Insider:
Citi's Tom Fitzpatrick also has an extremely bullish gold scenario out there. “We see no reason why this gold trend cannot perform as well as the last bull market in gold between 1970 and 1980,” he told King World News. “If you replicated that move exactly, it will take gold to $6,300.”
Plenty of analysts are expecting gold to run high in the coming months and years. Of course, gold won't hit $10,000 overnight, but Ronald-Peter Stoeferle of Erste Group estimated it could hit $8,300 as soon as spring of 2015.
Lee Quaintance and Paul Brodsky of QB Asset Managment and Richard Russell also forecast highs of $10,000 in the not-so-distant future.
It's time to buy gold, because as these analysts say, the run has just barely begun.+21
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