Saturday, February 07, 2009

Gold prices could hit $1,500, fears Merrill Lynch CIO GDX, AUY, SLW, TNR.v, SST.v, RMK.v, OK.v, MGN, FVI.v, HUI, XAU

So now when all major banks are becoming Gold bulls is it a sign of a Top in Gold? We do not think so: Gold is entering the phase of public recognition and following mania stage. Its monetary function as an only Currency which can be a real Store of Value is recognised by Tops in almost all FIAT currencies apart from US Dollar. System is broken, trust is not there any more: all governments will be competing for a weak currency at the next stage of reinflation recovery. Melting Treasury Bubble in USA will bring US Dollar down from its topping technical formation and Gold will go to the new highs. Do you remember our pray about 1% of inflow into Gold assets which will bring Gold demand Up 100%, it is happening according to the same major banks. Be prepare to move up the risk chain for a further gains: Silver mining and Junior mining companies: CDNX is ready to rock again.
"Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday.Dugan termed his apprehensions of gold striking such a high as a "fear" that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors.With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of "the most trusted currency", Dugan said. "We have never seen such a rush to buy gold. It's bringing in security and it's still affordable."Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. "While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems," Dugan said."
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