Gold swung today from US$566 to US$572, with a high asking price of almost US$574. Could we be seeing a break into US$600? Just over a month ago it hit US$500 for the first time in 25 years and the experts said it was temporary. Then it hit US$550 and the experts said it was temporary. We closed at US$570.70 with NYMEX oil at US$67.45, with a gold to oil ratio of 8.46.

The biggest banks in the world said it might settle around US$520 for the year, but we’re seeing buyers at US$570. Why is this?

I still feel pretty strong about a “correction” of a temporary nature in late February. I was thinking we’d see a 20% drop followed by a 30% climb over 6-12 months. A 20% drop from US$600 means falling to US$480 (my target was US$460-US$470 though). A 30% climb from US$480 means topping US$624 possibly by year’s end.

I receive e-mails criticizing this forecast, but I can only base it on the gut feeling based on my market research. So far this year, most of the growth has been by stock investment houses an investment banks chasing the price higher — investors are always known to create temporary bubbles as investors want to cash out 5% gains in 30 days. The physical gold users (gold bugs, jewelers and industrial users) have kept their purchases at a minimum. Some gold holders have been selling their gold to take advantage of the gain they see as temporary.

With taxes coming due April 15 and some futures expirations coming at the end of the February, I do believe the sell off could occur. A mass sell off would bring more paper-holders to sell of theirs, causing the 20% slide I’ve been thinking about. Of course, once the price drops, the physical holders would vaccuum the supply up — seeing gold back in the high US$400’s would give jewelers a big salivating smile. They know it’ll go back.

Then comes March, where we’ll see the loss of the M3 money supply figure in the US — open game for the government to inflate out of control. The mines are starting to lose valuable veins, and exploration is a minimum, which could bring us a to huge supply problem. The central banks are scared of the dollar, so they may increase their reserves by the tons — hundreds of tons. This means more demand, lower supply, and a much higher price.

I thought gold would hit US$660 by Christmas. I believe it can. And yet I don’t care. The more I acquire, the wealthier I feel, even when I value my holdings at US$250 an ounce. From now on, actually, I am valuing my gold at that price for the time being — better to have more real wealth than overvaluing it.

If you haven’t bought yet, go buy something this week. Even a silver coin (US$12-US$15) once a week is better than 3 lattes. You can still buy a 1/10th ounce gold coin for under US$75 at most local gold dealers. US$75 is 2 tanks of gas, just find a way to do it.

Don’t chase the ghost of quick overnight profits. There is no reality in these investments. Don’t hold paper, don’t hold stocks that don’t pay a nice dividend, and don’t trust people who get paid whether you gain or you lose.

In mining news: The Porgera gold mine in Papau New Guinea was shut down by vandals. With more mines having temporary closings, we will definitely see a lower supply right now — causing a short term price increase until the supply can be returned to the market. There are two supply issues to consider (actually, 3): are the mines empty? This requires exploration costs. Are the mines temporarily shut down? This means supply will increase later. Are the mines manipulating their reserves to raise the price? This could cause a huge fall in price if there is collusion.

Venezuela’s government is revoking concessions for idle gold mines. I’m not sure why government ever got involved in the first place. Subsidies eventually lose out for the taxpayers anyway.

Centerra of Canada reports that their gold mine profits are much lower than expected.

Newcrest in Australia pleases investors with their lower cost to produce gold.

Metallon of Africa shows why they’re at the top of the gold mining game.

Manitoba gold mines find higher grade ore in their two gold mines.

This site is now part of the Global Unanimocracy Network.

Gold swung today from US$566 to US$572, with a high asking price of almost US$574. Could we be seeing a break into US$600? Just over a month ago it hit US$500 for the first time in 25 years and the experts said it was temporary. Then it hit US$550 and the experts said it was temporary. We closed at US$570.70 with NYMEX oil at US$67.45, with a gold to oil ratio of 8.46.

The biggest banks in the world said it might settle around US$520 for the year, but we’re seeing buyers at US$570. Why is this?

I still feel pretty strong about a “correction” of a temporary nature in late February. I was thinking we’d see a 20% drop followed by a 30% climb over 6-12 months. A 20% drop from US$600 means falling to US$480 (my target was US$460-US$470 though). A 30% climb from US$480 means topping US$624 possibly by year’s end.

I receive e-mails criticizing this forecast, but I can only base it on the gut feeling based on my market research. So far this year, most of the growth has been by stock investment houses an investment banks chasing the price higher — investors are always known to create temporary bubbles as investors want to cash out 5% gains in 30 days. The physical gold users (gold bugs, jewelers and industrial users) have kept their purchases at a minimum. Some gold holders have been selling their gold to take advantage of the gain they see as temporary.

With taxes coming due April 15 and some futures expirations coming at the end of the February, I do believe the sell off could occur. A mass sell off would bring more paper-holders to sell of theirs, causing the 20% slide I’ve been thinking about. Of course, once the price drops, the physical holders would vaccuum the supply up — seeing gold back in the high US$400’s would give jewelers a big salivating smile. They know it’ll go back.

Then comes March, where we’ll see the loss of the M3 money supply figure in the US — open game for the government to inflate out of control. The mines are starting to lose valuable veins, and exploration is a minimum, which could bring us a to huge supply problem. The central banks are scared of the dollar, so they may increase their reserves by the tons — hundreds of tons. This means more demand, lower supply, and a much higher price.

I thought gold would hit US$660 by Christmas. I believe it can. And yet I don’t care. The more I acquire, the wealthier I feel, even when I value my holdings at US$250 an ounce. From now on, actually, I am valuing my gold at that price for the time being — better to have more real wealth than overvaluing it.

If you haven’t bought yet, go buy something this week. Even a silver coin (US$12-US$15) once a week is better than 3 lattes. You can still buy a 1/10th ounce gold coin for under US$75 at most local gold dealers. US$75 is 2 tanks of gas, just find a way to do it.

Don’t chase the ghost of quick overnight profits. There is no reality in these investments. Don’t hold paper, don’t hold stocks that don’t pay a nice dividend, and don’t trust people who get paid whether you gain or you lose.

In mining news: The Porgera gold mine in Papau New Guinea was shut down by vandals. With more mines having temporary closings, we will definitely see a lower supply right now — causing a short term price increase until the supply can be returned to the market. There are two supply issues to consider (actually, 3): are the mines empty? This requires exploration costs. Are the mines temporarily shut down? This means supply will increase later. Are the mines manipulating their reserves to raise the price? This could cause a huge fall in price if there is collusion.

Venezuela’s government is revoking concessions for idle gold mines. I’m not sure why government ever got involved in the first place. Subsidies eventually lose out for the taxpayers anyway.

Centerra of Canada reports that their gold mine profits are much lower than expected.

Newcrest in Australia pleases investors with their lower cost to produce gold.

Metallon of Africa shows why they’re at the top of the gold mining game.

Manitoba gold mines find higher grade ore in their two gold mines.

This site is now part of the Global Unanimocracy Network.