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How Long Can The Gold Bull Keep On Charging?

Most financial experts going on record these days seem to agree with the assertion that, at least for now, wise investors in the winter months of 2009 and heading into the spring of 2010, won’t need to travel all the way to the narrow streets Pamplona Spain in order to participate in the most exciting bull run of the season.

No need to risk hair nor hide as these market commentators who are openly talking about the current “Gold Bull Run” seem to be in agreement that the bulls will continue to run, smiling and laughing all the way to the bank.

Face it, as world wide economic woes continue and government currencies remain weak, gold continues to dominate the headlines as the safest and most profitable place to invest.

Is this just a passing trend that will quickly balance itself out like any other case of “ebb and flow” investing? Well, clearly the good people over at “Harrods” surely don’t think so, as they have now begun to actually sell gold coins and bars over the counter.

Let us not forget that, that just as the impenetrable “Sound Barrier” and the miraculous “Four Minute Mile” where once recognized as limitations that would never be achieve, the “$1,000.00 ounce of gold was an accepted barrier that may some day be approached, but never broken through.

Well that “S1, 000.00 ounce of gold” has already come and gone, pushing well beyond that formerly adhered to limitation and financial experts such as Charles Gibson, The Head of Mining Research at Edison Investment Research are predicting that considering all current, present day circumstances, we may well see gold going for nearly $2,000.00 per ounce by the year 2013.

Since the end of August, the gold price has risen by nearly 13% and when you take into account the weak condition of the dollar, falling to its lowest point in well over a year in comparison to other global currencies, the demand for gold continues to increase exponentially over time.

Basically, what you are just now experiencing is a trend much like we saw in the 1980s, when investors began to be heavily “bullish” on physical gold to effectively hedge their bets during a more and more uncertain economic environment.

In other words, as things continue to spin and tumble world-wide, people feel a lot safer knowing that while a fist full of dollars or any other countries currency may one day not even be worth the paper that it is printed on, but GOLD is the standard by which you can stand assured that if you possess it, you will always have something of great value, regardless of what the rates rise or fall to.

Let’s not forget, that gold earned its reputation as being “tangibly” valuable, not just as a form of coinage or currency, but as an actual commodity itself! Simply due to all of the hundreds of valuable things you can do with gold, within the various and multiple fields of science, technology, communications, medicine, art, industry, infrastructure and even health and nutrition.

According to the “Head of Research” at highly respected gold broker “Bullion Vault,”  Adrian Ash explains to investors around the world that “The significance of Harrods selling gold, shows how swiftly it is moving to become a mainstream investment something it certainly was not even five years ago.”

Let’s not forget about the Universal Law of Supply and Demand! As we continue down our current path of decreasing deposits of mine-able gold, the price continues to rise and the demand continues to increase exponentially due to weak global currencies.

Evy Hambro, the Co-Manager of the “BlackRock Gold & General Fund” makes the point that “The key factor …will be investment demand, which remains strong, according to the latest data from the World Gold Council.” Meanwhile Douglas Horn of New York's “CPM Consultancy Group” predicted gold price of $1,200 by the end of the year, when speaking in Singapore this week.

Of course we need to keep in mind that, typically, October is usually a down month for gold, as it goes through its predictable, annual “seasonal sell-off.” This year, October has come and in nearly gone, and we haven’t yet seen any sign of this seasonal decline on the horizon, so will it skip its usual “cleansing cycle” this year and let the bulls continue to run hard and free? Many say yes, while others say a temporary dip is still expected, but nothing as large as what usually occurs this time of year.

Popular commodities and investment expert Jim Rogers said intimated while speaking at a conference in New York that while he expects an approaching season of “correction” in the gold market, he still believes that gold will eventually hit the $2,000 an ounce mark within a decade. Rogers explained the precious metal will continue to run as the US dollar is on its way to losing status as the world's reserve currency.

Even many experts who predict some form of a correction on the near horizon, such as Gibson himself, point out that such a correction could still prove to be a great buying opportunity. Gibson explains his perspective by saying “I see dangers of a correction in the short term. The consensus is that it could pull back to around $1,015. But if inflation rears its head again, which will happen if unemployment eases and banks begin to lend again, that will provide enough headwind for a second phase of its bull run.”

Gibson concludes by asserting “fundamentally supply will never be able to keep pace with demand. In addition, with oil at circa $75, if its stays around that level until next March, that will represent a doubling in the cost per barrel which will drive inflation.”

However, on the other side of the “proverbial coin,” Justin Urquhart Stewart of “Seven Investment Management” has less faith in gold than most others, sighting the fact that the yellow metal, which should be doing quite spectacularly right now in India due to jewelry sales during the wedding months, is actually down from last year.

According to Stewart, “'The chances of gold roaring ahead are unlikely, if the dollar does stage a recovery, bullion may well fall back.” He then continues by stating that “It is gaining as a result of hype and speculation, remember you can't do anything with gold and it yield's zero.”

However most advisors disagree, pointing out that the prediction of the “Bull Run” coming to an end is based on suspect assumptions about the dollar staging a surprise recovery as well as not respecting the inherent “natural” worth and value of gold as a physical, usable commodity, which always increases during times of severe economic uncertainty and depleting gold reserves.

So, it appears that most Investment Advisors agree that this impressive yellow ore wins the official “Investors Gold Star Of Approval” for effectively preserving one’s wealth by  hedging against inflation, effectively diversifying one’s investment portfolio and for a natural, physical, built in buffer to protect against potential risk in unstable economic times.

Therefore, since gold bullion has been one of this decade's best performing assets, increasing its value by an average of 15% per year, one has to seriously and strongly consider investing in gold as a safe, secure and profitable move in the next several months.

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