Getting Used to Gold at One Thousand Dollars an Ounce
Here’s what I wrote about gold back in 2005:
“Gold bullion rallied to US$483 an ounce on October 12, 2005 — a new 17-year high — for many reasons: Huge American debt, a weak American dollar, rising inflation and simple supply/demand economics. In my opinion, the gold rally has been mild so far, with the biggest gains yet to come.”
Within the next few weeks, gold will be at twice the price I recommended the yellow metal for investment in 2005 and almost three times the price I suggested PROFIT CONFIDENTIAL readers buy the metal for in 2003.
Yes, we are going to get a correction in the gold market. The rise to $825.00 U.S. per ounce has not been a straight line up. Nor has the decline of the U.S. dollar been a straight line down. Investments and commodity prices don’t go up and down without experiencing healthy corrections to deter the speculators… that’s until the end when the speculators are left holding the bag.
Gold’s going up because not much has changed since my writings in 2005:
— The American debt machine continues to take speed. The U.S. government continues its wars in foreign countries costing billions a day. American consumers feel a heavier debt load, as the crashing housing market punishes unwise home purchasers.
— The U.S. dollar makes new record lows against the yen, euro, pound and Canadian dollar each passing day. Who would have ever thought the Canadian dollar would be at a 130-year high against the greenback?
— Yes, the housing market is deflating. But you can hardly call crude oil at $96.00 U.S. per barrel deflationary. Personally, I don’t believe government figures on the inflation rate. Neither does gold bullion.
I said it in 2005 and I’ll say it again as we approach 2008: “In my opinion, the gold rally has been mild so far, with the biggest gains yet to come.”