$1,267 Gold

That’s my fundamental, technical and sentimental prediction. Why?

Fundamentally gold should be much stronger. We are amidst the stage of the credit crunch where everything falls, and Dollar deflation seems to be the name of the game. Gold is a safe-haven and has acted as such surging 58% from $650 when the news really started getting worrisome. The Dow is set to fall bringing the Dow-Gold ratio back into double-digits for the first time in over a decade. Recession will weigh on gold now, but be its best friend come what will.

Technically gold is itching for a breakout, as are just about every neutral chartist over the spectrum. Momentum and technical-based traders, seasonal buyers and most importantly the crowds are all waiting for the breakout. When it comes expect a gold-rush.

Sentimentally we may see gold rising in tandem with its October 2007 rise probably into March or even April of 2009. The 58% rise was anticipated and we can expect the same this time around, similar to last year, and similar to its actions during the bull run of 1974-5. Too bullish? I’d say not. Much of the buying now is physical, diminishing available supplies that will play out in months time. We saw such sentiment last year and the sell off offers the balance to0 see it all happen again.

A 58% rise from the $800 low would give us a price of $1,267 for gold, and a possible $25-30 price of silver. Ready or not?


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