The gold price is poised for a long jump. Steady in the 970 range with a few peaks above 990 recently, gold is looking good to make the big jump passed the magic 1000 dollars an ounce anytime soon.
With the US economy continuing to falter despite frantic attempts to prop it up, and with banks now teetering on the edge with more debt than one can throw a stick at, more and more investors will be seeking that safe haven for their assets thereby pushing gold up into the rarefied atmosphere of 1000 to 1500 dollars an ounce over the coming weeks and months.
Not lost on investors lately is the fact that gold and oil have long been compatriots in the market place and oil is now approaching an all time high at near 105 dollars a barrel, adjusted for inflation. Yet gold still remains at less than half of its inflation adjusted high of 2400 USD per ounce. So What gives?
Previously the price of gold rose at around twice that of oil, yet now we have a scenario where the gold price is rising at only half that of oil. The up down, up down, up down of the gold price seems to indicate a fight between those forces keen to keep the price of gold down and those forces trying to bring it back to normal. Well you cannot hold a good man down and you cannot continue to hold gold down under these circumstances in the face of such economic turmoil, so it is sure to want to follow alongside oil as it has always historically done in the past.
This means it has some catching up to do and a gold price of 2,300 dollars an ounce is not out of the question over the coming months.
So, exercise your golden legs folks, the long jump is coming!