Gold prices broke out past the $1300/oz mark later in September, just as I predicted in my post on gold prices in August. It didn’t take much market turmoil or negative market news to push gold higher – just the promise of QE lite in November and the prospect that the midterm elections will remain in the Dems’ favor.
Gold is benefiting from weak trading volumes. It takes less volume to push everything higher right now, but no one is trading stocks. They’re piling into commodities. Central banks aren’t even selling any gold anymore. In fact, central banks have been buying more gold this past quarter than they have since 1964.
Six Huge Factors You Need to Know About Gold’s Coming Breakout
How High Gold Can Get in October
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Peter Schiff recently commented that he sees gold heading as high as $10,000/oz – yes, ten thousand dollars an ounce – within the next two to five years. But he’s been saying this for a while, so why listen?
Listen to David Rosenberg instead. Or Jim Rogers. Or John Paulson, who says inflation is so close around the corner that now is the time to be buying a second home.
Read some Zero Hedge (especially the many wise comments – you’ll have to sift through a few) too. Silver is trading near all-time highs and today gold graced $1315 an ounce before profit-taking kicked in.
Should You Invest in Gold Bullion, Stocks or Gold ETFs?
Gold Mania or Peak Gold?
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Gold mania? Not even close. Quantitative easing 2 hasn’t even been unrolled yet and we’re not even in the holiday gold-buying season yet. New deposits were just found this week in Guyana – and if we’re offshore drilling for oil, you can bet we’ll be offshore mining for gold before peak gold becomes reality.
But we don’t need peak gold production to see more of a run-up. Markets are clearly still jittery as is evidenced by the historically low trading volumes right now. We’ll need to wait until after midterm elections before we might see much of a correction in the gold price. Last year it wasn’t until the new year that the so-called gold “bubble” started to deflate.
Face it, the best time to buy gold was 14 months ago. But the second best time is still probably now. As far as I can tell.
Gold Price Performance and Outlook for 2011
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