My gold target for 2010 remains 1,300. I set that in June of 2009, and until we either hit the target or the uptrend breaks, it remains the same. My longer-term target is $1,635.
Here is a list of seven forces that should drive gold prices higher in 2010…
1. Gold suffered a correction of about 8% from its recent peak. This was much needed and took some of the froth out of the market. Now, after consolidating, it’s easier for gold to go higher.
2. Dollar sentiment has shifted. Speculators in the U.S. dollar have finally shifted their betting positions from short to long. This clears the path lower for the dollar and higher for gold.
3. Risk of U.S. default rising? Recently, traders have worried about a European Union sovereign debt default. As I mentioned in Tuesday’s video for UWD, the US government may be cooking the books on Treasury bond purchases. This raises the risk of a U.S. sovereign debt default. The United States is still $12 trillion in debt with a double-digit unemployment rate, more spending, higher taxes, while the monetary policy will likely remain loose in 2010. It is becoming harder to sell enough Treasuries to cover the mounting debt.
4. Strong continuing central bank demand - Central banks have now become net buyers of gold in the last half of 2009.
5. Rising inflation fear – Inflation is a by-product of reflationary monetary policies, low interest rates, and expanding government debt in virtually all of the major industrial nations.
6. Growing investment demand – Gold investment demand went up by 25% to 220 tons in 2009. This trend should continue in 2010.
7. Lack of new supply. Despite the highest prices ever, world gold mine production will likely continue to decline in the foreseeable future.
Related Posts
- 2 Forces Driving Oil Higher Today (11/04/08)
- Bullish Forces in Gold (04/27/10)
- Gold Update – Heading Higher as GLD Hits Record (04/09/10)
- Transcript for ‘Gold Gears Up for a Move Higher’ (08/17/10)
- Howe Street Interview and Gold Heads Higher Again (02/05/09)
{ 1 trackback }
{ 2 comments… read them below or add one }
I, for one, would appreciate your outlook for silver and copper! Not to mention platinum and palladium!
Also what is your take on whether bullion coins will outperform coins with numismatic value, or the other way around?
Thanks.
Where are available ETF’s lister? Are descriptions available?