Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world’s monetary system with liquidity, according to an internal client note from the US bank Citigroup. The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.
This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.”They are throwing the kitchen sink at this,” said Tom Fitzpatrick, the bank’s chief technical strategist. “The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock. “Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don’t think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes,” he said.
We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised.” Gold traders are playing close attention to reports from Beijing that the China is thinking of boosting its gold reserves from 600 tonnes to nearer 4,000 tonnes to diversify away from paper currencies. “If true, this is a very material change,” he said. Citigroup said the blast-off was likely to occur within two years, and possibly as soon as 2009. Gold was trading yesterday at $812 an ounce. It is well off its all-time peak of $1,030 in February but has held up much better than other commodities over the last few months – reverting to is historical role as a safe-haven store of value and a de facto currency.
Gold has tripled in value over the last seven years, vastly outperforming Wall Street and European bourses.
Sounds like a good way to hedge your bets…..if you can find it.
In other words, this is a good time to dump gold.
Dump gold for dollars? Hmmm.
Since Citigroup’s predictions last year were dead on, I have to believe this. Oh, wait…
I have gold hair…hmmm…guess I better wear a hat or two…or three.
Bubble 2009 anyone?
What is with all the “gold bugs” on AM radio these days? Gold is way up-and people should buy why? Do people understand that Central Banks may be allowed to reduce gold reserve requirements to raise cash; in the process flooding the market with gold? Add to that, most “investors” are already paying a premium when they purchase gold (if you don’t buy in $300,000.00 blocks), which leaves a lot of exposure to a drop in price. It will be interesting to see how this all plays out.
Gold is of no more “real” intrinsic value than fiat (When Wal-Mart starts to accept bullion I’ll change my mind on that). The reason for this is that gold is a commodity that can be produced (due to new technologies) at will. The truth is, there has not been a finite quantity of gold in decades, which is what has historically made it a hedge for inflation! What is of real value is resource ownership such as water and land.
#5 I’m glad you know more then professional analysts.
@5,6: Just watch what have happened in the current crisis. Gold went down, than as the market stabilized it also stabilized. Hence, I trust more the reasoning of #5 than analysts who have interest in peddling gold…
Has Goldman Sachs issued a “buy” recommendation for gold yet? When they do, you know it’s time to dump gold and start stockpiling water, food, guns and ammunition.
With gold, you can buy food and water.
With guns and ammo you can shoot the guy with the gold and take his food and water.
“Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world’s monetary system with WORTHLESS paper,”
Fixed.
BTW, predicting monetary inflation when the printing presses are put into overdrive is as difficult to predict as getting wet when you jump into a pool…
“# 10 Eric said, ” I keep reading stories about the lack of retail gold, yet the spot price keeps dropping.”
Last week I was up with a sick child a couple of times in the middle of the night. Every other commercial was hawking gold & silver coins for retail. Maybe you should read more reliable sources…
Hedge funds have taken over commodity buying, using commodities to “hedge” their bets on the stock market.
The end result being that commodities — ALL commodities — are moving parrallel to the stock market. They are all currently down right now, even though many commodities should be up based on current supply and demand.
Bottom line, stay the hell out of commodities including gold.
Ok…Lets ask a few questions FIRST..
1. what is the price of gold in a FEW other nations?
This is important..BECAUSE there are nations NOT in the stock market, NOT being forced to INFLATE the prices..
2. ONLY way gold can REALLY go up, is if’ someone is HOLDING/cornering/restricting the USE/flow of it..OR that we just wasted 100mill tons of it on circuit boards we DIDNT RECYCLE..
How much for de little girl?
Inflation is going to kill us long before the Gold bubble. My money in the bank is about to have 700 billion brothers and sisters making them worth less… or worthless. Either way corporate bailouts are going to hurt. Public bailouts will hurt as well so we shouldn’t go there either. We need more people who can spell fiscal responsibility.
Citibank is probably going to use their $125 billion bailout to buy gold… then make a profit telling everyone gold is going through the roof. Does this sound like market manipulation to anyone else??
15,
“Does this sound like market manipulation to anyone else??”
DUH!!
Yeah all these people were so right about the stocks, housing and oil prices.
Need less to say:
DON’T YOU BELIEVE IT!
Cursor_
Casey Serin is now a gold bug. A contrary indicator if there ever was one.
Whenever you see stuff advertised on TV to the point that it becomes a fad, you should take that as a signal to get-out. A good example is when TV shows started teaching people to ‘fix-and-flip’ houses in order to make money. At about the same time the housing market started to crash. Fads are always contrarian signals.
Owning physical gold is only something that people that believe that currency will become utterly worthless would consider. It is heavy, commands a heavy trading premium, unaccepted as currency by everyone (try paying for anything in actual gold)… if you want to participate in gold ownership, then owning stock in gold mining companies is a much more sensible approach.
BTW, the same ‘analysts’ were predicting $200 / barrel of oil right now… made sense at the time, but it was wrong wrong wrong.
Bets on whether Citi is holding gold now and wants it to go up so they can sell it?
#19. Unbound Said: “A good example is when TV shows started teaching people to ‘fix-and-flip’ houses in order to make money. At about the same time the housing market started to crash.”
Those type of infomercials have been on since the 80’s, long before the housing market failure. I know this because I made a bit of money doing it.
Oh really? I bought about 3 ounces of gold when it was $300 an ounce. If it goes up to $2000 an ounce, I’ve made a bit of a profit, don’t you think? I only wish I had bought more.
#22. Same here. Let them laugh.
Citigroup is riding the coat tails of Peter Schiff.
Gold is way up. I think it is on the way down.
Before oil cratered there were reports of it going up towards $250-500 a barrel. Sounds like they bought gold high and now want to get out before it cracks.
I know this penny stock you would love…..
Gold does have a use in circuitry and survivalist groups. Usually it goes up when there is more war, and down when there is less. If we are on the exit from Iraq it should also go down.
Middle eastern types LOVE gold as well. Now that oil is down they might have to sell some of that gold. …..Just speculating.
When something triples in value, be it real estate, oil, or tech stocks watch for the downside!
#26 – Eric
>>My favorite one is for the company that has
>>their own smelting facility
I hope no one is involved in an unfortunate “schmelting” accident, like GoldMember. That must hurt like a bastard.
I’ll believe gold will rise that high when silver punches through $50/ounce.
I have gold — enough to live on for a few years if it is 2000. All my US $ is in US stock. If the dollar tanks, and inflation hits own stock. If deflation hits, jump off a bridge.
I don’t believe in future telling, these are just reactions to what is happening.
The world wide fiat system has not gone through this, so it might be OK. If you think you know, you are wrong. Citi Bank can kiss my ass.
#3 – one of the best “zingers” seen here.
(Even though it was an easy kill)
#8 Comes in just barely a nice 2nd place
If you decide to buy gold, you’ll have to get it from a reputable dealer (unless you want to be ripped off). And that always means that they get a substantial fee, over the actually price per once. Then when you go to sell it, months or years later. Same thing, there’s a fee that the broker will take out of your sale price, for buying it from you. So the dealer/broker is the only one who’ll make money from gold. Because regardless of which way the price goes, they still make money from the transaction. Just like with the Stock Market. The brokerages always make the money. Back during the days of the California Gold Rush, it wasn’t the miner who got rich, or the general stores who got rich, or the saloon owners who got rich. It was the bankers who got rich. Because they dictated what gold was worth in US currency. And got their profit from selling it for much more, than they paid out for it. And it’s always going to be that way. The big boys aren’t going to let us play their side of the game.