Gold has hit $500. What's next? $1,000?

12/6/2005

Sound extreme?

Perhaps. But that’s what most people said four years ago about $500 gold. The Forces Driving Gold Bullion toward $1,000 and beyond are Now More Powerful Than Ever .

When gold hit $500 this week, it set off a chain reaction of events that are just now beginning to unravel.

No economy will be immune as there has also been a dramatic rise in demand for scarce natural resources like paladium, copper and oil.

Strangely, however, the financial media treated the rise in the gold price as a non-event. No big headlines. No front-page stories in the Wall Street Journal or New York Times business section. Little excitement, and certainly no euphoria.

Perhaps its because gold has been a "dog" for so many years. The gold spot price spent much time below $300 at the start of the 21st Century - a far cry from the more than $850 peak it reached back in 1980. Compared to the new technology deluging Wall Street a few years ago, gold was simply an unattractive investment. With its price adjusted for inflation since 1980, gold should be worth over $1,000 today. Perhaps only then it will be worth heralding.

This is a bad sign for Wall Street. But it’s a good sign for gold investors — the first indication that the rise of gold has barely begun.

We still have all the same supply-and-demand forces — rising consumer demand (especially in India and China) investor demand, industrial demand, and extremely limited supplies. In fact the amount of investment in gold mining has been decreasing over the years and we are in danger of demand outstripping supply dramatically in the future.

Plus, now we have a new, critical factor that’s kicking in: Inflation.

Inflation is coming back — with a vengeance.

The chief reason: Despite all the lessons we’ve learned from history about the great propensity of politicians to print worthless currency, there is still not one nation in the world with a monetary system tied to a gold standard.

Even the Swiss franc is no longer a true gold-backed currency.

This gives central bankers around the world carte blanche to massively pump up money supplies whenever their economies slow down.....devalue their paper currencies anytime they go deep into debt ... and drive asset values skyward.

The speed of money printing presses, the one limitation they had in previous years, has been overcome with the advent of paperless, electronic money. All they have to do is press a single button.

Not many understand this: With a gold standard, governments would effectively be constrained to a strict budget, chained to a single benchmark, reined in to prudent financial behavior. That’s why there’s no person in power favoring a gold standard. They want to keep their freedom — to do the wrong thing!


BOTTOMLINE: Expect Gold to head higher


For More Information Contact:

Steve Pond
enquiries@1st-gold-information.com
www.1st-gold-information.com

This release was published on openPR.