Wednesday, November 7, 2007

Gold heading for $3000 by 2012

Oil, gold and euro surge to record prices

"Gold has surged $180 an ounce since mid-August. The last time it moved in this fashion, in May 2006, it gave up almost all the gains in a matter of weeks. The concern is that buyers for the jewellery industry will hold back until the price falls, while European central banks are likely to take advantage of the spike to offload bullion."

When gold corrects sharply, this is the time to add to positions. This upleg is going into spring of 2008 before a major consolidation phase.

Posted by sold 2 rent 1 @ 07:28 AM (1361 views)
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16 thoughts on “Gold heading for $3000 by 2012

  • The real reason gold is in this secular bull is not the USD falling or the oil price spiking but world money supply is soaring. Money supply can be translated as “debt supply” as money = debt. Gold is soaring because fiat currencies are devaluing fast. The banking system requires debt levels to expand to infinity, which we know is not possible. Once this debt bubble bursts, money supply will contract, banks will fold, and gold will shoot to the moon.

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  • “The last time it moved in this fashion, in May 2006, it gave up almost all the gains in a matter of weeks.”

    I think that anyone trying to analyse this increase in the gold price by looking backwards and assuming it will ‘correct’ as it did last year is probably missing the point. We are in uncharted territory. I may well be wrong, obviously, – but if one waits for a correction, one may miss the boat altogether.

    But that sounds like a similar argument to that used for paying silly prices for a house though doesn’t it? Interesting times!

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  • Gold is at $837 this morning (8:45 AM)
    Silver is at $15.90 after being at $14.70 yesterday.
    Yesterday I bought a load more silver exploration stocks.
    We could see silver propel to over $20 in this upleg between now and spring 2008

    Also have you seen the Canadian dollar
    http://newsvote.bbc.co.uk/1/shared/fds/hi/business/market_data/currency/11/11633/three_month.stm

    It has lept more than 10% against the GBP in 2 months.
    This adds to the benefits of buying gold/silver stocks on the Totonto Stock Exchange and having you cash on the sidelines in CAD and buying on the dips.

    When GBP crashes it will be a win-win-win situation.

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  • “but if one waits for a correction, one may miss the boat altogether”

    This is the buyer’s dilemma, and one that I face. I think a lot will depend on equities: if they tank (which, IMHO, they will) gold will temporarily suffer, before taking off into the stratosphere. In the mean time I have moved the bulk of my savings out of GBP. It is, as with the $, effectively a worthless fiat currency, back by nothing other than a debt mountain.

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  • S2R1
    I’ve managed to get as far as selling the house and buying gold – but you’re ahead of me on the CAD/gold/silver stocks. How do you go about opening an account to buy and sell on the Toronto Stock exchange and hold loonies?

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  • STR1

    Please do tell i also would like to look into that, holding any kind of stock overseas – doesnt that make you open to exchange rates though as you have to buy in UK Pounds?

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  • Loony Tunes – s2R – absolutely on the money – wait for the dip in Gold – i expect possibly a sharp correction or a sideways channel. if an a-b-c-x-a-b-c this is mega bullish.

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  • Anyway long term the only time to sell Gold is when Gordy announces a buy!!! After all he managed to sell 60% of our reserves near a 20 year low. Au contrare Mister B.

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  • Rimmer thats what STR is “banking” on . You buy the shares now with “strong” pounds and when you come to sell you recieve more pounds for your loonies. So (If STR is right) both the shares and the currency you but them in appreciate.

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  • Harold – make multiple purchases. Instead of spending 10,000 on gold, spend 10 x 1,000 i.e. purchase 1,000 every month for ten months.

    If the market tanks in the next few months, you will only have a few grand invested, and can spend the rest at the bottom of the dip.

    If it doesn’t dip you are not completely ‘out’ of the market while it is going up.

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  • Regardless if gold corrects a little bit, it’s still on an upward trend. If you’re investing for gains next week you might be disappointed, but if your aim is strong growth in 6-12 months you’ll be well rewarded. There’s a good article on gold in MoneyWeek today, “Is Now A Good Time To Buy Into Gold?”
    http://www.moneyweek.com/file/37538/is-now-a-good-time-to-buy-into-gold.html

    A few weeks ago when the price was $750 I held off buying because I thought it would dip back to $650 temporarily. Now it’s toying with $850. Even if I buy now and it dips back to $750 for a short period, the long-term trend is definitely up. The analogy with the housing market (“will I miss out if I wait for prices to fall?”) doesn’t really apply because housing is illiquid; a house takes months to buy and sell, dissuading the “hot money” speculators who are pushing up gold. Also the housing figures are averaged monthly or quarterly, not daily. A three-month average gold chart would show a clear upward trend.

    That said, I quite like S2R1’s idea of investing in gold-mining shares on the Toronto Stock Exchange. There are some good uranium-mining companies out there too. My broker (iwebsharedealing.co.uk) doesn’t offer TSX shares though, any idea who does?

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  • It’s the old story. Timing is everything, ‘fundamentals’ is nothing. As Keynes said, ‘markets can remain irrational for longer than you can remain solvent’. Buying and selling gold is like any other game – don’t play it unless you’re very good at it.

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  • I trade with interactivebrokers.com. You need to open a margin account so you can do currency dealing as well. Market data for TSX is 14 CAD a month. 3/4 of my cash allocated for speculative investment is now in gold/silver/uranium exploration/mining stocks. The other 1/4 goes in on any serious correction. If the HUI reaches 700-750 next spring then I might consider taking some profits.

    Remember gold/silver will be a bubble in the end (probably around 2011/2012). Don’t wait too long to get in. The whole idea about contrarian investing is you get in when the sector is totally unloved and get out when it is completely mainstream.

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  • S2R1
    thanks for the info

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  • Thanks s2r1. My brother (who works in investment banking) also uses Interactive Brokers and he’s done quite well for himself. Their website software is a bit complicated for retail investors, but if you want to make the most of your money it seems to be the way to go.

    I think it’s time to add a risk warning: Never gamble more than you can afford to lose. If you’ve spent years saving a deposit for a house, years during which you’ve scrimped and saved and foregone flash TVs and fancy holidays, then think carefully about how much risk you’re willing to take. You can get a decent 5-6% interest rate in an ordinary bank account. We are not financial advisors and we could be telling porkies just to inflate the value of our own shares, since the ones we recommend are usually the ones we own.

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