Tags: Peter | Brimelow | gold

Gold Bugs Still Think $1,400 Target Can Be Hit

By    |   Tuesday, 08 Dec 2009 02:36 PM

Gold took a $40-plus pummeling on Friday, but the gold bugs are entrenched and determined to carry on, writes financial journalist Peter Brimelow.

In his column on Marketwatch, Brimelow notes that the primary motivation for Friday's gold price dip was the surge in the U.S. dollar, following unexpectedly positive U.S. employment data.

The gold sell-off was broad.

Kitco's Gold Index indicates that $14.90 of gold's $46.10 decline was caused by the dollar rise. There were other factors at play as well.

“The gold bugs themselves are standing firm,” writes Brimelow. “And they can claim they saw it coming.”

Brimelow says that gold bugs still think $1,400 gold is a reasonable target this year.

Brimelow says there are what he calls “radical” gold bugs who comment on Bill Murphy's LeMetropoleCafe.com site and who are still chatting up the price of the precious metal.

“One Café writer points out that silver, which usually accentuates a gold move, was notably less damaged on Friday, causing gold to become cheaper in terms of silver: ‘I cannot recall ... (a) sustained period where the falling ratio of gold-silver has occurred in conjunction with a fall in the price of the metal,’” reports Brimelow.

Brimelow notes that gold shares sharply cut their losses on Friday afternoon, despite gold itself going lower: The last example of this was similar performance last October 30th marking the end of the late October weakness precisely. A week later gold was $50 higher.

Le Metropole Café writers, Brimelow notes, are looking to India. India's importers are likely to be forced by their customers into the market this week, Brimelow notes.

Other experts seem to agree, in part.

The International Business Times is reporting that factors driving gold price higher continue to be low real interest rate, weak USD and strong investment flows.

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Gold took a $40-plus pummeling on Friday, but the gold bugs are entrenched and determined to carry on, writes financial journalist Peter Brimelow.In his column on Marketwatch, Brimelow notes that the primary motivation for Friday's gold price dip was the surge in the U.S....
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Tuesday, 08 Dec 2009 02:36 PM
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