Gold Seen At USD 3,500, 6,000 and 10,000 Per Ounce
Our friends at Stephen Flood’s GoldCore.com write on this American Independence Day: Further impetus to higher prices may come from the ECB who are expected to cut interest rates to a record low tomorrow – continuing ultra loose monetary policy which should further weaken the euro.
Negative interest rates continue to penalise pensioners and savers in European countries and this will lead to further diversification into gold.
Financial markets are already starting to wonder about the solidity of last week's summit measures to tackle the euro zone crisis and soon they may question whether even looser monetary policies will help prevent recessions and sovereign defaults.
With Independence Day today (Happy July 4th to all our American followers, clients and friends), the ECB decision tomorrow and NFP on Friday, trading should be quiet today but as we know illiquid markets can lead to outsized market moves.
We tend to try and avoid predictions in GoldCore as the future is largely unknowable and there are so many variables that drive market action that it is nigh impossible to predict the future price of any asset class.
However, our opinion has long been that over the long term all fiat currencies will depreciate and devalue against the finite currency that is gold.
For this reason we have long held that gold would reach its inflation adjusted high of $2,400/oz and silver its inflation adjusted high at $140/oz and the equivalent in euros, pounds and other fiat currencies.
Gold at just over $1,600/oz today remains 33% below its record inflation-adjusted high in 1980.
Silver at just over $28/oz today remains 80% below its record inflation-adjusted high in 1980.
However, we have tended to focus on the important diversification, store of value and safe haven benefits of owning physical gold (and silver) bullion.
Overnight, some respected analysts of the gold market have suggested that gold is likely to or will reach much higher levels in the coming years – between $3,500/oz and $10,000/oz (see commentary). (Linked articles at the bottom of the story at GoldCore.com.)
We see no reason to change these estimates and would concur with Amoss, Davies and Sinclair that there are strong grounds for believing that gold prices will rise much higher in the coming months and years.
Indeed, given the huge increase in credit growth and money supply internationally we believe that these estimates may in time be conservative. – Much more excellent commentary at the link below.