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April 5, 2010 - Quo vadis, gold? After highlighting the tail-end of the first quarter with a two-week run, gold again is perceived to have gathered momentum. Questions had been revived like what’s in store for gold this year, in the next five, maybe 10 years? Toward what direction is it heading? Is the first quarter a sign of a momentum reminiscent of 2000-2009? Or is gold’s energy already spent?
Quo vadis, Gold?
One industry authority referred to 2000-2009 as “stage one” with “easy money being made.” Presumably there is a stage two as he talked of the market “experiencing an intermediate phase” for “serious investors and more serious money…”
Another old hand in the industry sees no immediate foreseeable end to the run of gold and predicts that gold can go as high as $1500 in about five years. He added that prices may even threaten the $2000 mark over the long haul.
Financial Forecast Center expects gold to breach the $1200 level by the middle of 2010
There are credible bases for these optimistic forecasts. For one there is the experience of 2000-2009, not to mention the experience in the 1970s. After all, the decade ended with gold on a vigorous upswing that went past the $11000 level.
For another, the very same economic climate that nursed the bull run of 2000-2009 and other bull runs is still very much in the air.
World economy remains in shambles, with Greece as the latest to attract world attention with its finances on the verge of bankruptcy. Greece is a cause for worry for the European Union since it is a member nation. The Greek crisis already has caused the Euro to lose its value versus other major currencies as there are doubts that the EU can save Greece without banking on IMF help.
Terrorism is on the rise, with Russia as its latest victim.
Back home, deficit spending remains high, interest rates remains low and cannot be raised without creating bigger economic repercussions, the stock market has not recovered its former strength, The wars in Afghanistan and Iraq that eat up huge expense funds will take longer to resolve.
These are indicators to the predictable direction for gold take. “Quo vadis, gold?” The reply is UP.
Shawn Penny
Senior Staff Writer - Rare-Coin.org
