Before lunchtime today both gold and silver hit new all time highs. This is becoming virtually an everyday event!
Not that we are grumbling, we’re having a great ride with our precious metal holdings and long may it last!
The problem is how to analyze (techno speak for best guess used by us pundits/know alls) what will happen next in this market and pass it on to our readers with some confidence that we have got it right.
For some days, even weeks, we have been expecting a significant correction and still we wait. Does this mean that the gold being bought by national banks in lieu of fiat paper currency for the long haul is so far outweighing the shorter term speculators, hedge funds etc, that any profit they are taking is having little or no effect?
Is it because so much faith has been lost in the Mighty Dollar along with the Euro, Pound et al., that the only remaining store of value that can be relied upon is gold and silver?
Well if that’s the case, we have the question of Government bonds, all those triple AAA rated countries with the US in the fore are still successfully foisting their wares on the financial world at yields that just don’t seem to add up to a scenario of the eventual galloping inflation which will occur when the money printing excesses (aka Quantative Easing) come home to roost.
There are so many factors in the totally international gold market to consider, to balance against each other and the whole, that it would take a genius of epic proportions to come up with a sequence of events that turns out to be accurate. Einstein – eat your heart out!.
That there will be a significant correction in the course of time is, of course,certain. Whether it will be this side of $1370 (the price as we write) or $1400 or any other price off the top of the head is anybody’s guess.
What we are fairly certain of is that before too long, maybe by end 2011, perhaps even sooner, gold will be looking at $3000 an ounce or more as and when inflation inevitably hits the stratosphere.
In the meantime, take all the analysts, market pundits, media, financial advisors, Wall St. share pushers and last but not least government spoke persons utterings with a large pinch of salt. Their guess is unlikely to be as good as yours as they their have their vested interests to pursue.