Extract: "As Herb Stein so correctly observed, “If something cannot go on forever, it will stop.” Last year I predicted a trading range for 2004 of between $380 and $450 an ounce and I am still comfortable with that range. Longer-term, gold is going higher, but if history is anything to go by, it won’t be in a straight line and we don’t know how high is high.
The gold industry requires a minimum of $350 an ounce to generate any kind of a return on capital. At $250 to $300 an ounce, it was destroying itself.
This secular bull market is most directly comparable to the 1929-1934 and 1967-1980 bull markets in hard assets, including gold. The average of these two bull markets was nine years, so at three years I believe we are probably closer to one-third of the way along.
Remember, the fundamental driver of this gold bull market is the very significant structural imbalances facing the US dollar. Three-years into this bull market those imbalances have worsened. You just have to look at the trade and current account deficits to see what I am talking about".
NEM Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
