Gold is up $64 to $844 as of 12:15 PM EST. I could end this post here and that one sentence could be the entire story.
However, like a good infomercial, “there is more!”. Specifically, Bloomberg is running a story that gold may hit $950 by the end of the year “as central banks and miners hold back sales and investors buy the metal as a haven against falling stock prices.”
The good news for gold bugs is that a $950 price isn’t tethered to simply a shaky stock market. Otherwise, a market turnaround on its own could quell the gold rush.
Rather, London-based researcher GFMS Ltd. states that Central Bank sales will drop 46 percent in 2008, while mine supply will decline for a third year. Specifically, with respect to mine supply, global mine production will drop 2.3 percent this year to 2,422 tons, the lowest since 1996 That is going to put great pressure on an already string tight supply issue.
Moreover, GFMS believes demand from investors worldwide will soar 38 percent to 778 metric tons, with purchases in east Asia more than doubling.
GRANDICH HITS THE NAIL ON THE HEAD AGAIN
If I didn’t know any better, I would think that Peter Grandich single-handedly sets the price of gold. For about the zillionth time over the last 3 years, Grandich once again pegged an overextended gold price (oversold or overbought) when he made this statement just 5days ago in his newsletter:
“I have just recorded the single most oversold condition for Gold since the great
bull market began at the start of this decade”
After a brief hiatus, it looks like gold is back and possibly stronger than ever.
Regards,
George
[…] morning to you all. On September 17th I discussed the increasingly tight supply of gold that led Bloomberg to run a story about prices running to […]
[…] to quality, we also have the makings of a real supply demand issue. If you missed my post of September 17th, here is an […]
Hi George,
Thanks for the mining info and links. I’ve been following the price of gold using Lear Capitals free real-time tracker Exact Price ( http://www.learcapital.com/exactprice ) and wasn’t really all that surprised to see gold jump today given the news of the government’s bailout of AIG (which I think is a bad idea, personally). Right now gold’s at $867.70. I wouldn’t be surprised to find it over $870 in a number of hours.
I’ve been reading around the web the info you mentioned on supplies and with that in mind it is hard not to imagine that gold will be much higher in the coming year. So I hope that gold is back from the “hiatus”.
Thanks for the link to Peter Grandich I clicked over and signed up for his email list.