Why gold could hit $5,000

[liberal N proud]

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.

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

The road to $5,000 gold
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."

It's all about supply and demand.

http://money.msn.com/investment-advice/why-gold-could-hit-5000-dollars-mirhaydari.aspx?GT1=33036

[RandomThoughts]

1. And if it is about supply and demand.

Then to make money, lower supply and put people in hardship.

Or increase labor supply to make money, and put people in hardship.

Why the system has to be regulated by advocates for the people.



And why some try to remove justice, so that regulation wont stop them by accurate enforcement.

[Scuba]

2. Should the right wing manipulators get their way, eventually...

...they'll have nothing to eat but gold, diamonds and paper certificates.

[MineralMan]

3. Ah, More Goldbuggery, I See.

Good luck with your investment.

[liberal N proud]

5. The only gold I have is the ring on my finger

[Mira]

9. I've done really well with Gold, can I have yours since you don't seem to want it? n/t

[abelenkpe]

10. It is probably a good idea to sell right about now.

Or at least soon.

[Po_d Mainiac]

17. Sell? in exchange for what? n/t

[abelenkpe]

19. Yeah there's the problem.

Read an article recently claiming google, apple, gold were all things that were at their top and should be sold. And that was my question too, where would one put the money after selling? In a bank savings account getting .1 percent interest? Would it be safe there? In real estate that keeps dropping? In the stock market that also looks pretty over inflated?

[Art_from_Ark]

21. Really-- in exchange for what?

It's not like the early '90s when I could get 7% or 8% interest on a long-term CD. Stocks are non-tangible blips that can be issued in unlimited quantities and are manipulated by crooks. And real estate is a gamble on the double-zero at the roulette table.

[dmallind]

22. Yet I have somehow made more % gains on these "blips" the last couple of years

than anyone has made in gold.

[Art_from_Ark]

23. Are you sure about that?

That's quite a claim.
If making so much money on blips was so easy, everyone would be doing it.

[dmallind]

24. abso-fricking-lutely sure, and not even a stretch claim.

In the last two years gold has gone up 61.7% from 910 two years ago.

The Dow is up 52.5% in 2 years from 8250 (but up 90% in 26mos - WAY more than gold)
NASDAQ up 63.7% from 1720
SP500 up 51.7% from 880

These by the way are being very literal 2 yrs - all markets had strong gains two years ago this week and fell today. You may be tempted to say "hah- I must be right because gold has outperformed 2 of 3 indexes" but that assumed no guided investments at all - the equivalent of just saving money in the equities markets instead of banks and taking what the general trends give you (and even then NASDAQ beat gold). This however is brain-dead investing that takes no knowledge whatsoever. Start picking some winners - even very easy ones - and 61.7% is a piece of cake.

Ford was my single biggest stock investment in the last two years when everyone was panicking about auto stocks. It took nothing beyond a bit of attention to the news to know Ford was in the best financial position of the big 3 and dragged down way too much by association with GM etc - hardly a genius insight beyond the ability of hoi polloi. I didn't even get near the bottom (in the 4s) and bought in low 6s. Today it closed on a down day at 15.08 - about a 150% gain that well over doubles that of gold. I can't honestly claim those gains for all my portfolio, and indeed I rely on broad market-tracking funds for most of it to be honest, but I play individual stocks for some of it, and have averaged 78% overall (no way to prove that of course beyond sharing statements which I'm not likely to, but hopefully the above easily verifiable data will demonstrate it's far from an unlikely claim that would take a special genius to achieve - a blithering idiot would have made gains comparable to gold in these "blips" over the sane period - a bit extra takes only a little bit of market savvy, which trust me is all I would claim for myself)

[bossy22]

4. once the fed reserve raises rates

gold will plummet.

[Po_d Mainiac]

7. And the rate hike will come when?

[roamer65]

12. Not until 2012 or 2013.

The gov't cannot afford higher rates. Our interest payments will become unbearable very quickly.

[abelenkpe]

18. Wouldn't that be a good time to nationalize the banks then? nt

[westerebus]

14. The Bernank said:

nothing will happen to rates until after the next two FMOC meetings.

Stocks sell in May and go away.
Then in June QE2 says, adieu.
If July on the beach, do you get sand in your shorts?
The dog days of August by all reports.
Wait for the Bears to support my comports.
If for nothing else, PIMCO punked the reds, from the FED's own bed.
Is the cupboard bare of the silver so fair?
That the dip is but a blip on the way to the moon.
Some old wiseman in the woods called tune, BTFD and dance like a Loon.

[Po_d Mainiac]

16. Ayuh

While little Mother Masters
Went to the COMEX cupboard
To get poor Jamie a brick

But her shorts were all bare
And China'd been there
While the chairsatan has not a care

Pimpco may be wise
As S&P screams demise
Q2 GDP proves a witch in disguise

Coffee and crude are at par
A bribe with chocolate goes far
Rest well with Ruger and a long Ag bar

[orangeapple]

15. you're right

The run in gold is a play on The Bernank's malfeasance. It will continue as long as he does...

I expect by the time the Bernank (or more likely his successor) throws in the towel it will take Volcker-esque rates to break the back of inflation and restore confidence in the dollar.

[Art_from_Ark]

20. The run up on gold has been occurring for 9 years

long before the appearance of "The Bernank". Raising rates at this stage will just increase the US debt burden, so that's not likely to help. It's a much different world today than in 1979 when Volcker came on the scene and the US debt was a more manageable few hundred billion.

[buddysmellgood]

6. Tulips too!

[tucsonlib]

8. Sounds Familiar

Like those experts predicting a 30,000 Dow not so very long ago....

[abelenkpe]

11. exactly! nt

[roamer65]

13. Get used to dollar devaluation and stagflation.

That is the future of this country, as long as it exists.