Thursday, 22 May 2008

Re: Gold's Outlook back to $650-$750? 2008-05-22

Wednesday 22nd May 2008: 6:01 p.m. Nothing better to do... so I posted on Yahoo!

Another comment from me to this posting:
Gold s Outlook back to $650-$750 area by Victor Adair
that refers to this 'interesting' gold bearish interview:

My comment was posted here:

Re: Gold's Outlook back to $650-$750 area by Victor Adair which hasplenty of debate about John Nadler's commentaries.

OK, OK, so John Nadler had his little speech about $740 being the 'clearing' price for gold and his original forecast for this year was an average of $740 I believe, so let's see if he's right. Or maybe it was $840, who cares? So far, it hasn't got within $100 above 740 from the topside, so it looks very unlikely that he is going to be within +/-$200 with his forecast. I did though see a double H&S potential in gold that would take it back to $600 but is that likely to materialise? NO. I pointed it out here: a 68% Fibonacci retracement of the entire bull run from 300 or so would point to the same, if we got a similar pullback to that of 1974-76, which was very close to a 68% Fibobnacci pullback from £198 to £103 after the original rally from £42.22 in 1971: but really, is this 1974? NOT LIKELY! do have the start of out of control inflation like in 1974 (and an oil crisis) but our economy cannot even stand interest rates over 5% or it will bust. What is the chance of slowing this inflation down with interest rates under 5%? Virtually nil, of course. Oil is at $133; everytime you look away for a minute, it has gone up again. It might blow off at $200 and come back down for a while (it's not likely ever to be under $100 again, is it?) but once Peak Oil is recognised, it will go to $1000 I think. Even with a poxy 5:1 gold:oil ratio, that would give $5000 gold. With peak oil, I think the gold: oil ratio will fall from its historical above 10 ratio for a while. If a real crisis hits in the next 10 years and oil is rationed worldwide or seized for military use as Jim Dines predicted on last weekend's interview with Eric King, then no-one will take fiat money for oil and gold and silver will be remonetised for oil purchases at that point. Only an opinion! Nadler is stuck in the Year 2000 gold bear market thinking of it as only jewellery. He is 8 years behind the curve already. True, jewellery demand is still a kind of important factor (at the moment) but getting less and less so all the time, as the monetary metal factor will increase relentlessly from here on. Why even bother to read John Nadler?

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