Fox News : 12/28/2010 - Peter Schiff: Gold Is Headed To $5,000/oz.

Update : Gold Passes $1,400 an Ounce

Gold passes $1,400 an ounce on inflation concerns and trading momentum

By The Associated Press

NEW YORK December 28, 2010 (AP)

Gold prices surged above $1,400 an ounce Tuesday as a weaker dollar pushed investors into the safe haven of precious metals.

Gold also seems to be gaining value based on its own track record for 2010, when global economic instability made it the go-to investment for jittery traders.

"Still looking for ONE good reason for" the price increase, analyst Jon Nadler wrote in a note to clients Tuesday. "No trader can own up to one."

Nadler, a senior analyst with Kitco Metals Inc., said gold's upward momentum seems to be one of the key drivers in its continued rise, creating a kind of casino-like environment where traders snap up contracts in anticipation that others will as well.

"In so many words, it is rising because it HAS risen already. Stack the chips," Nadler wrote.

Still, there are fundamentals supporting gold's rise, said George Gero, senior vice president for RBC Wealth Management. Precious metals are a classic hedge against inflation. Traders are speculating that more central banks will take action to stimulate their economies in 2011, which could lead to inflation and make gold even more attractive than it is now.

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SURVEY: Gold prices and output to go higher in 2011, PwC

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TORONTO - Despite the current strength in the price of gold, mining companies in Canada and globally are predicting high gold prices to continue throughout 2011, according to PricewaterhouseCoopers' 2010 Global Gold Price Survey Report released in mid-December

Key findings:

• A majority of 82% of gold producers expect their forecasted production levels to increase.
• Nearly 75%of gold mining companies expect the price of gold to continue to rise until Q4 2011. However, the current price of gold is still far below the high of 1980 in real terms.
• Gold companies predict the price of gold will peak between US$1,400 and US$3,000, with 40% believing the price will peak around US$1,500 when the survey was conducted in November 2010.

"Given the high demand for gold, it will be interesting to see if companies that have located marginal deposits of gold will kick-start their production and move faster than they would under normal circumstances," says John Gravelle, Canadian mining leader, PwC.

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Wall Street Journal Report

Capital Economics: Gold Going to $1,600 in 2011

By Matt Phillips

Getty Images

Capital Economics is out with a bullish note on old yeller, saying they now forecast that the metal goes to $1,600 by the end of next year and 2,000 by the end of 2012. Gold is currently trading around $1,385:

We are increasingly positive on gold. Admittedly, we are relatively recent - and regrettably late - converts to this camp. A firmer dollar, fading inflation fears and greater risk appetite may also limit the upside in the next few months. But the price of gold should continue to be supported by demand for a safe haven from other potential economic and financial shocks. Front-runners include the risks of a US-China trade war and some form of EMU break-up. Even if the euro-zone holds together, the rolling financial crisis in Europe should keep investors nervous. We are also increasingly concerned that the longstanding fiscal problems in Japan will finally come to a head in the next year or two.

What’s interesting to us about this call is that it’s decidedly not about using gold as a hedge against inflation.

Capital Economics

In fact, check out this chart included in Capital Economics’ note. You can see how the price of gold isn’t being supported by inflation as it was during the last bubbl– err, period of well-reasoned, enthusiastic investment in the the shiny rock — back during the early 1980s. Capital Economics’ Julian Jessop writes:

Gold prices peaked at around $2,300 in real terms in January 1980, albeit driven by demand for
an inflation hedge. Inflation was then much higher than is remotely likely now (see Chart 2), and these gold price levels were not sustained for more than a few days. Nonetheless, the shocks that could still be to come would readily justify a retesting of these highs.

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(FT) Gold a godsend in uncertain times

By Ruth Sullivan 

Published: December 12 2010 08:43 | Last updated: December 12 2010 08:43

Investors have turned to precious metals, particularly gold, traditionally seen as a safe haven, as concerns grow over eurozone sovereign debt, widespread economic uncertainty and currency falls.

“In times of uncertainty and austerity nothing glitters quite like gold,” says Paul Duncombe, head of multi-asset investment solutions at Schroders.
 
The World Gold Council expects gold demand in 2010 to exceed that of last year, driven by investment demand as a result of concern over quantitative easing, currency conflict and inflation, in addition to strong demand for jewellery in China and India, and a revival in the use of gold by the industrial sector.

“The rediscovery of gold as both a currency and a monetary asset has been brought into sharp focus,” says Marcus Grubb, investment managing director at the council.

Investment into physical gold rose to $14.6bn in the first nine months of 2010, up from $8bn in the same period a year ago, according to the council. This comes largely from retail investors buying bullion but also from both institutional and retail investors gaining exposure to the precious metal through physically backed gold exchange traded funds.

Schroders has been “investing more in gold [across multi-asset funds] this year, using it to hedge against risky assets such as equities that can fall in an uncertain economic environment, and also as a hedge against developed market currencies as their value falls, using gold as a quasi-currency”, says Mr Duncombe.

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Get On Board The Gold Train, Next Stop $1,800 (Forbes)

Get On Board The Gold Train, Next Stop $1,800

posted by SCOTT REDLER

Gold has been one of the stories of the market over the last several years as the global economic crisis and an overall lack of trust in the “system” has led investors to seek a more evergreen store of value.

I personally first began talking about Gold in December 2008 when it was trading at $850/ounce. I felt the technical indicators and a compelling story suggested a move to $1,300-$1,500. Although I did not hold the SPDR Gold Trust ETF (NYSE:GLD), which is my preferred vehicle for trading gold, for that entire run, I traded gold on several occasions within that time frame with much success.

When you have a powerful idea, you must be able to execute it in a way that fits in with your overall trading or investment strategy, and that’s what I have done with gold. In hindsight, do I wish I had bought tier four gold in 2008 after I made that prediction on CNBC, and held it for the entire measured move? Sure, but I have not lost any sleep over it. I feel content that I traded gold in a way I was comfortable with. I have applied my own active, risk averse approach to the gold trade, locking in gains and taking risk off when it seemed appropriate to do so. Depending on your overall strategy as a market participant, customize your approach to trading gold.

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November jobs report: Unemployment rate up

By Annalyn Censky, staff reporterDecember 3, 2010: 8:44 AM ET

NEW YORK (CNNMoney.com) -- The economy continued to add jobs last month, but at a much slower pace than expected, while the unemployment rate rose to 9.8%.

U.S. employers added 39,000 jobs to their payrolls in November, the Labor Department reported Friday. That marks a major slowdown from October, when the economy added an upwardly revised 172,000 jobs.

November's numbers also fell short of the 150,000 gain that economists surveyed by CNNMoney.com were expecting.

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