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Title: Gold hits $600. Now what?
Source:
(MarketWatch
URL Source: http://www.marketwatch.com/News/Sto ... ?siteid=mktw&dist=TNMostMailed
Published: Apr 7, 2006
Author: Myra P. Saefong,
Post Date: 2006-04-07 09:16:49 by Flintlock
Keywords: Gold
Views: 236
Comments: 3
Gold hits $600. Now what? Traders say investment shift sets up $1,000 price by 2010 By Myra P. Saefong, MarketWatch Last Update: 5:17 PM ET Apr 6, 2006 SAN FRANCISCO (MarketWatch) -- Gold has reached $600 an ounce for the first time since 1981 but the real surprise will be where it goes from here, with experts predicting a drop in the near term that could clear the way for four-digit prices in the next few years. "Gold at $600 an ounce might be a surprise to many, but these are the same people that were surprised when gold hit $300, when it broke $400 and when it moved to over $500," said Emanuel Balarie, a senior market strategist at Wisdom Financial. "Most likely, they will still be surprised when gold hits $1,000 an ounce," which could come in the next three to four years, if not sooner, he said. Gold futures for May delivery climbed as high as $601.90 in electronic trading early Thursday in New York, and peaked at $600 in the regular session. The contract closed at $599.70, up $7.20. The strength helped lift silver futures above $12 an ounce for the first time in more than 22 years. See Metals Stocks. Gradual move It's no secret that gold's garnered increased attention for at least the past year. Gold futures were trading around $429 a year ago. The sector has seen a growing number of new gold-market players, with exchange-traded funds having the potential to take up the amount of supply made available as the price rises, said Julian Phillips, an analyst at http://GoldForecaster.com. That, combined with the fact that supply is not growing at nearly the pace of demand, has been a major contributor to gold's climb, he said. But "there are many driving forces in the gold market, not just one singular event," said Peter Spina, an analyst at http://GoldSeek.com. The U.S. dollar will take center stage this year, and the "paper currency world" will itself be questioned, said Phillips. And as a "longer-term thermometer, what happens to global confidence, and the ability of the major structures of the monetary world to measure true financial values, affects gold," he said. Against this backdrop, gold is seen as a safe-haven investment. "The typical investor has yet to discover the attractiveness of this asset -- the gold price is just starting to reflect this move as investment dollars flow in," said Spina. Phillips compared the state of the global economy to a dinner party with too many guests. "Like a dinner party host serving for 10 people, what does he do when 20 come to eat?" he said. "As uncertainty grows in the global-money world, the impact on gold is greater because new buyers of gold now include increased buying by present holders, creating a 'shunt-effect' on demand as it hits supply," Phillips said. Not so frantic Contrary to some market beliefs, gold is "not in a frantic market, a cornered market, or a hysterical buying binge," said Thomas Hartmann, an analyst at Altavest Worldwide Trading. The market is simply "facing shifting values," he said.
Poster Comment: June Gold is off about $5 as I post this, but remember, nothing goes straight up.
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#3. To: Flintlock (#0)
$700?
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