HEY NICK....here we go....

[Brian K. Smith]

Analysts Foresee $1,300 Gold By Year-End 17 August 2010, 4:24 p.m. EST
By Allen Sykora
Of Kitco News
http://www.kitco.com/
(Kitco News) -- Worries about a fragile U.S. economy are likely to keep investors shifting toward gold and could push the metal to fresh record highs near the $1,300 area by year-end, analysts and traders say.

December gold futures early Tuesday peaked at $1,231.10 an ounce on the Comex division of the New York Mercantile Exchange, their strongest level since late June. They eventually settled $2.10 higher at $1,228.30 an ounce.

As of 3:36 p.m. EDT (1936 GMT), spot gold was 60 cents higher at $1,226.10.

Mike Daly, gold and silver specialist with PFGBest, looks for gold to “go much higher” than the record hit earlier this summer due to uncertain U.S. economic conditions and a still “fragile” environment in Europe, where sovereign-debt issues were a major focus earlier this year. The peak for a most-active Comex futures contract was $1,266.50 back in June.

“Economic numbers here, such as housing and jobs growth, have been very negative,” Daly said. “That is giving savvy investors globally a lack of confidence in fiat currencies. Most people right now, who have disposable income, are preferring to get into more tangible assets, primarily gold and silver, for a safer-haven investment.

“They see that gold and silver and precious metals in general have retained value better than most commodities over the last couple of years.”

Kevin Grady, a trader on the Comex floor with MF Global, cited continuing foreclosures are a harbinger of further support for gold, since it shows many Americans are still struggling amid weak economic conditions. In fact, with a federal-funds-rate target of zero to one-quarter percent, the Federal Reserve is essentially offering “free money” to banks with the hope lending will jump-start the economy, he said. Yet, many Americans are not able to borrow, unless they have a high credit rating and cash for large down payments.
“And the people who have money are saving,” said Grady, who looks for $1,300 gold by January. “People are holding onto what they have.”
Meanwhile, government debt continues increasing.

“I think it's a slow grind, but gold should go much higher from here,” Grady concluded.

Michael Gross, broker and futures analyst with OptionSellers.com, described his company as “cautiously bullish” on gold on ideas that any economic recovery could be “spotty.” Still, the metal could experience “fits and starts” rather than moving up in a straight line. He figures gold could “modestly eclipse” the highs from June in the foreseeable future and later in the year potentially hit $1,275 or even push $1,300.

Further support may come from political uncertainties in the U.S., with congressional elections this fall, as well as debate among lawmakers on whether to continue some or all of the Bush Administration tax cuts due to expire at the end of the year. This could put some pressure on equities and prompt some movement into gold, Gross said.

“Uncertainty tends to be good for precious metals,” Gross said. “If people are not sure what to do with their money, they put it into gold. That seems to be the safe and conservative bet, and we expect that to continue in the second half of the year.”

Investors are “tired” of the uncertainty in which government or central-bank officials suggest improvement in the economy, with their comments followed by weak jobs data, Daly said.

“There is so much fear based on what is going on in Washington,” said Bob Haberkorn, senior market strategist with Lind-Waldock who also anticipates $1,300 gold yet this year. “You're getting new investors looking at gold and silver.”

Charles Nedoss, senior market strategist with Olympus Futures, looks for further U.S. dollar weakness, which in turn tends to support gold. Investors often buy the metal as a hedge against a softening greenback, plus a weak dollar makes commodities less expensive in other currencies and thus can boost demand.

Low market-set interest rates, as a result of a soft economy, may result in an eventual retest of the 80 area for the dollar index, Nedoss said. It currently stands just above 82.

“I just don't see that turning around,” said Nedoss, also anticipating $1,300 gold. “I think the economy is showing us now that it's fragile enough that it can't withstand higher rates.”
Seasonal Factors Could Provide Additional Support
While analysts describe macroeconomic conditions as favorable, the calendar is approaching the time of year when gold tends to get a seasonal boost.

“We're getting closer to the (autumn) wedding and festival season in India,” Daly said. “That is normally a time when gold spikes a little bit.”

September and October tend to be strong months for silver and gold alike, Haberkorn said. “Of all years, from an economic standpoint in this country and around the world, I think an upside move is more than warranted,” Haberkorn said.

Once the gift-giving season winds down in India, physical buying of gold often continues ahead of Christmas in Western nations and later the Chinese New Year.

Still, Gross cautioned that the economy will remain the key catalyst more-so than any seasonal tendencies. In recent years, gold has traded “almost exclusively” based on economic expectations, he said.
“I would expect that to continue,” Gross said. “Any physical (seasonal) support would certainly help gold, but we don't see that as the potential major price determinant for gold over the next several months.”

[Nick Gromicko]

The problem as I see it, is that Americans still save fake money as if it was real, instead of storing real wealth. They're just little pieces of paper with faces on them folks, and Obama keeps printing them. He can't print gold.

Once Americans come to realize that the only way to avoid this day-in, day-out tax that we all pay from defacing the dollar through printing, is to not save dollars (just use them as a convenient way to pay for things in the very short term), the scam of the century will come to an end.

[Michael Larson]

Originally Posted by gromicko

The problem as I see it, is that Americans still save fake money as if it was real, instead of storing real wealth. They're just little pieces of paper with faces on them folks, and Obama keeps printing them. He can't print gold.

Once Americans come to realize that the only way to avoid this day-in, day-out tax that we all pay from defacing the dollar through printing, is to not save dollars (just use them as a convenient way to pay for things in the very short term), the scam of the century will come to an end.

If we were truly "printing" we would be inflating.

We're not.

Quite the opposite.

[Nick Gromicko]

Where do you see deflation?

[rsmith24]

Its stagflation right now. Do your homework.

[Nick Gromicko]

Its stagflation right now. Do your homework.

Correct. And stagflation is a type of inflation.

[Joseph Burkeson, CMI]

Originally Posted by mlarson

If we were truly "printing" we would be inflating.

We're not.

Quite the opposite.

Ahh sh*t, I agree with mikey.

[Michael Larson]

Originally Posted by gromicko

Where do you see deflation?

Housing and land prices mainly.

And much more to come.

[Nick Gromicko]

Housing prices aren't going down much more (because they've already dropped below material/labor cost). The big correction last year merely brought them back to where they should have been absent Barney Frank's meddling. http://www.nachi.org/forum/f13/home-...ming-up-53043/

The whole 1/3 of all sales being distressed properties thing can be looked at as a transfer of wealth from previous homeowners (who at one time had equity in their homes) to new homebuyers (who now have the equity in their homes).

[Michael Larson]

Originally Posted by gromicko

Housing prices aren't going down much more (because they've already dropped below material/labor cost). The big correction last year merely brought them back to where they should have been absent Barney Frank's meddling. http://www.nachi.org/forum/f13/home-...ming-up-53043/

The whole 1/3 of all sales being distressed properties thing can be looked at as a transfer of wealth from previous homeowners (who at one time had equity in their homes) to new homebuyers (who now have equity in their homes).

Material and labor costs will decline IMHO.

If they don't we will no longer be competitive with the rest of the world.

I am still seeing a glut of properties and decreasing prices in my market.

Most everyone who used the $8000 tax credit bought too soon.

[Joseph Burkeson, CMI]

All the result of the Bush Administration pissing away our nations prosperity & surplus on two middle-east wars without a chance to win and no hope to get out. The trillions of dollars wasted would have been much better spent in the United States, repairing infrastructure and developing new sources of energy while providing jobs for Americans. The broken window parable in regards to economics is an asinine and foolish way to invest in our future and should be forever abandoned.



A Permanent Housing Collapse?

The recent chaos that erupted when 30,000 people waited hours in the Atlanta, Georgia heat to receive applications for subsidized housing is a mere symptom of a worsening national problem.

The housing market appears to be on a never-ending downward spiral, with the much-discussed "recovery" always around the next corner.

The reasons that such a recovery is impossible at the moment should be obvious: millions of people do not have jobs; millions of others work only part time; millions more work fulltime but make very little money; and additional millions fear losing their jobs.

Under these circumstances, there can be no recovery in the housing market, which will continue to contribute to the broader depression-like economy in the U.S.

Excerpt http://www.globalresearch.ca/index.p...rticleId=20659

[Michael Larson]

Obama and Co. are the biggest Keyenesians ever.

It should be obvious by now that it ain't workin'

NEXT

[Rob London]

I think Warren Buffet - the second richest man in America and perhaps the greatest investor in history - said it best:

"Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

[dquigley]

Originally Posted by rlondon

I think Warren Buffet - the second richest man in America and perhaps the greatest investor in history - said it best:

"Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

A very smart man using the simple tool of common sense and logic when others are looking for some secret formula. You pretty much have to listen when he speaks since i don't believe he has ever been wrong. I'll read his quote again now -------- man, I wish I had said that.

[Doug Edwards, CMI]

Originally Posted by jburkeson1

All the result of the Bush Administration pissing away our nations prosperity & surplus on two middle-east wars without a chance to win and no hope to get out. The trillions of dollars wasted would have been much better spent in the United States, repairing infrastructure and developing new sources of energy while providing jobs for Americans. The broken window parable in regards to economics is an asinine and foolish way to invest in our future and should be forever abandoned.



A Permanent Housing Collapse?

The recent chaos that erupted when 30,000 people waited hours in the Atlanta, Georgia heat to receive applications for subsidized housing is a mere symptom of a worsening national problem.

The housing market appears to be on a never-ending downward spiral, with the much-discussed "recovery" always around the next corner.

The reasons that such a recovery is impossible at the moment should be obvious: millions of people do not have jobs; millions of others work only part time; millions more work fulltime but make very little money; and additional millions fear losing their jobs.

Under these circumstances, there can be no recovery in the housing market, which will continue to contribute to the broader depression-like economy in the U.S.

Excerpt http://www.globalresearch.ca/index.p...rticleId=20659

http://www.washingtonexaminer.com/op...101302919.html