Thursday, April 21, 2011

Why gold could hit $5,000

Image: Gold © Comstock Images-Jupiterimages

With turmoil overseas and energy prices on the rise, investors are worried. They're worried about geopolitical risk. They're worried about a falling dollar. And they're worried about inflation becoming entrenched as the Federal Reserve continues to administer its cheap-money medicine despite signs of inflation.

As a result, gold is on the move again. For much of last year, gold moved higher over worries about Europe's debt crisis and a "double dip" recession in the United States. Prices fell into a funk in the fall, though.

Now, a new set of concerns has gripped the hearts and minds of investors. Fear has returned.

And the yellow metal again set new highs this week, closing on April 21 at $1,503.80 an ounce.

So how high can it go?

Believe it or not, some analysts are calling for prices to move close to $5,000 -- not immediately, but sooner than you may think. ...

This is because, according to the folks at Standard Chartered Bank, gold is moving into a new "super-cycle" as a number of structural factors -- including consumer demand from Asia and tepid growth in supply -- combine to push prices higher. The team, led by Dan Smith, is looking for prices of $2,107 an ounce in 2014 as its base forecast.

The team's members see the potential for much more. In their words, "statistical modeling suggests a possible 'super-bull' scenario of gold prices rallying up to $4,869 in nominal terms by 2020." ...

via Why gold could hit $5,000 - 1 - precious metals - MSN Money.

I'm interested in people who are using actual gold coins as payment for personal transactions. How do you verify that the coin is genuine? If it was verified, would you trade a $2,000 used car today for a 1 oz gold coin if you didn't need the money right away?

1 comment:

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