Can gold hit $1,500? The price of gold is flirting with $1,100 an ounce. Many other precious metals continue to surge. How much higher can gold go - and what's it all mean? EMAIL | PRINT | SHARE | RSS TWITTER Yahoo! Buzz DIGG FACEBOOK DEL.ICIO.US REDDIT STUMBLE UPON MYSPACE MIXX IT Subscribe to Markets
feed://rss.cnn.com/rss/money_markets.rss Paste this link into your favorite RSS desktop reader See all CNNMoney.com RSS FEEDS (close) By Paul R. La Monica, CNNMoney.com editor at large Last Updated: November 4, 2009: 1:48 PM ET
NEW YORK (CNNMoney.com) -- Gold investors are partying like it's 1849.
The price of the yellow precious metal hit yet another all-time high Wednesday. At nearly $1,100 an ounce, you have to wonder just how much higher gold can go in the next few months. Is it $1200? $1300? Heck, is $1500 out of the question?
The Gold Rush of 2009 has been stunning to watch. Unlike some prior gold price spikes, the "good" news about gold's recent rise is that it does not appear to be due to worries about an imminent meltdown of the financial system. Gold rallied in early 2008, for example, just as Bear Stearns was about to collapse.
Instead, gold has rallied recently as the dollar has weakened. Gold, along with other metals, such as silver and copper, and commodities, like oil, are benefiting from inflation fears.
Investors around the world have fled the dollar due to worries that the massive amounts of money pumped into the U.S. economy by Congress, the Treasury Department and the Federal Reserve will eventually lead to inflation.
Prior to this week though, many experts thought that the bump in gold had more to do with momentum traders taking advantage of these fears and simply riding a hot hand. But there is now growing evidence that real demand for gold is playing a role in the run as well.
Gold, unlike silver, copper and many other metals, does not have that much of an industrial use. But gold has often been considered the safest of safe havens when the dollar declines. As a hard, tangible asset of value, some investors buy gold as an alternative to the dollar.
The International Monetary Fund announced on Monday that it sold a huge chunk (200 metric tons) of gold to the central bank of India. Now there is chatter that other nations may also want to bulk up on gold.
"More central banks may look to move into gold and out of the dollar. There are some rumblings that it could be like a series of dominos now that India has taken the first step," said Darin Newsom, senior analyst with Televent DTN, a financial markets research firm based in Omaha.
Partly for this reason, Newsom said that it's not out of the question for gold to go as high as about $1,400 an ounce in the next year or so.
Now to all those who think 0.75 m oz are disappointing :
If there is not much left, than 0.75 m oz is worth a lot !
LRC Price at posting:
2.0¢ Sentiment: LT Buy Disclosure: Held
