2008 Gold Forecast: Next Stop $1,000 Per Ounce

Last year at this time I wrote, “I except 2007 to be another banner year for gold bullion.” And that’s exactly what we got. Gold bullion prices rose from $650.00 U.S per ounce in the first few days of January 2007 to $838.00 an ounce on December 31, 2007, making gold one of the best performing investments of the past year.
I’ve been bullish on gold since 2002 and I’m as bullish now as I ever was courtesy of a weakening U.S. economy, a plunging U.S. dollar and a credit crisis that’s far from over. Since the beginning of 2001, when gold traded at $269.00 U.S. per ounce, until today, gold is up 219% in six years. Back in early 2007, I called gold bullion “The Six-Year Bull Market No One is Talking About.” In 2008, I expect gold to mark the seventh year of its ongoing bull market.
On a fundamental basis, the poor U.S. economy and the continuing flow of negative financial news from the U.S. virtually guarantee that the Fed will ease monetary policy in early 2008 — sending the U.S. dollar even lower against other world currencies. But what currencies will investors run to?
My bet is that they will run to gold bullion as the most stable currency available. China has made its preference for gold known… and I can’t see the Chinese (sitting on over $1.0 trillion U.S. dollars) running to yen or euros.
Technically, gold is now at its strongest point in six years. Yes, I do expect gold to correct lower soon from its current overbought status, but I see the coming natural correction in gold bullion prices as a buying opportunity. Remember, December 2007 was the first time in history that gold bullion closed out a month above the very important $800.00 U.S. per ounce level.
I’m predicting that 2008 will be a banner year for gold bullion, with the yellow metal topping $1,000 U.S. per ounce sometime during the year. Investors should seriously be considering quality gold stocks for their portfolios. For U.S. investors, gold stocks denominated in non-U.S. dollars may be most attractive (that’s gold stocks trading on non-U.S. stock exchanges like Canada’s TSX).