Gold Heading For $US1800

Gold breaks through $US1515 an ounce. ($US48.71 gram). In September 2011 Gold reached its all time high at $US1895 an ounce. Considering the world is in a lot more turmoil now than in 2011 the chance of gold hitting $US1800 is almost a given.  With extreme retail demand for Gold in China, Russia and Hong Kong in particular the race is on for Gold to hit the $US1800 by years end. Some bullish analysts are predicting the new benchmark for Gold will be in excess of $US2,000 ounce. Sounds crazy but a few years back the prediction was $US1,000 an ounce and the pundits laughed. Not laughing so much now. Moving cash out of China has become almost impossible so what alternative?, Crypto currency or Gold? Seems to convert the Renambi or Yuan (Chinese Dollar) to Crypto or Gold is a 50% discount for cash. So it seems if you have Gold maybe sell it in China for double the current price. Only problem is that if you are not spending the cash in China you then laden with the Chinese currency. 

Some European banks are struggling with debt and in particular some Italian banks are facing serious financial issues. When one bank fails, there is a knock on effect to other banks. So the expectation is that over the next six  months we are looking at some failures in some of the middle size banks in Europe, which will add to the demand. As the global currencies decline the flight is to Gold. Adding to the rush is that although the Gold miners are continuing to produce the easy open cut mines are gradually going to underground mining and the costs almost double. The  simple and easy to mine and relatively low cost for shallow Gold deposits seem to be disappearing. There has been little or no great new big discoveries in the past decade in Australia which is also putting pressure on the yellow metal.

Goldman

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