Gold Jumps to $1,085!

Casey's Daily Dispatch (11/04/2009)
"Gold is up on the announcement that India bought half of the proposed IMF sale of 403 metric tons. China had appeared ready to unload some of its $2 trillion of foreign reserves for gold, and India came out of nowhere to scoop up 200 metric tons at about $1,042/oz.

That then drove the market higher yesterday to $1,085 per ounce. At a profit of $40/oz, so far India has made $257 million in a couple of days. (32,150 oz/metric ton X 200 metric tons X $40)

This is good news for India and better news for Casey Research subscribers who have been holding gold and gold stocks for years.



What do we expect? At the beginning of the year, I predicted $1,150 per ounce as the end-of-year level and was more bullish than some of the other prognosticators. I didn't really see the amount of selloff we saw in the middle of the year. The $1,150 assessment seems conservative considering the recent spike and the growing mistrust of the U.S. dollar. The price is up from $930 in July to $1,085, which is a $135 gain in four months or about $39/month. With two more months to go, adding $78 to today's $1,085 gets us to $1,163.

With all that is going on from Afghanistan and Iran, to new government spending and continuing dollar demise, I think that $1,200 is as likely as my original call.

The long-term implications of government deficits as long as the eye can see indicate that gold will be about the safest investment you can make."

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