Today the gold price is less than 2 percent below the 1000 dollars per ounce.
Who would have thought, 5 years ago that the gold price would climb so high. This is no 1980 flash in the pan. This is the real McCoy.
As we prepare to break out the champagne, eyes are now looking speculatively at the $2000 per ounce mark. Some even speculating higher. Crazy? Not really. How crazy would it have been to predict $1000 per ounce five years ago. Many gold experts, including the noted James Turk, predicted then that the price of gold would go over US$1000 per ounce. It was just a question of time.
Agreed the weaker dollar, rising inflation and other factors have all had their effect on the rise but gold was bound to rise as the consumer price index rises. Gold is always good for buying goods and services ounce for ounce. An ounce of gold will still buy the same products as it did in 1975. But you need a mountain of paper currency these days.
There may be a bit of profit taking when the magic $1000 is reached. But then it will be onward and upward once again.
As long as we have inflation and a weaker US economy and gold being seen more and more as a safe haven, the gold price will continue to climb.
It still has a long way to go. The 1975 to 2008 graph says it all. The trend is likely to continue well past the $2000 per ounce mark and a long way beyond.
Chip Hanlon, who holds gold as the manager of $1.5 billion at Delta Global Advisors Inc. in Huntington Beach, California advises, "It is hard to see how the monetary environment is going to be anything but supportive of higher gold and commodity prices anytime this year."
And Ron Goodis, a trader at Equidex Brokerage Group Inc. in Closter, New Jersey, who has been buying and selling gold since 1978. points out, "It's up 15 percent since breaking the 1980 record in January, and may rise another 33 percent to $1,300 an ounce by year end."
The gold price is not a roller coaster it seems, more like a rocket to the heavens!