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« Gold Stocks: Oversold? | Main | DOW Jones Industrial Average: Smoke and Mirrors! »

$1500 Gold according to Merrill Lynch!

Merrill Lynch logo 14oct08

An interesting snippet carried by MarketWatch this morning is that Merrill Lynch, yes they are still with us, predict higher gold prices due to the inflationary effects of the current financial bail out.

From an article by Moming Zhou who wrote the following:

NEW YORK (MarketWatch) -- Gold prices could hit $1,500 as global plans to rescue the financial industry are set to increase inflation pressures, according to analysts led by Francisco Blanch at Merrill Lynch. "The unintended consequence of the ongoing financial bailout will be a return of inflationary pressures to the commodity markets," wrote the analysts in a note released Monday. The analysts didn't say when gold would hit the price target. They also predicted oil prices will rise to $150 a barrel.

We agree with the above but it is a pity that there is no frame to go with it, as an open ended forecast will probably be fulfilled at some time down the line, but when? Timing as you all know is about 90% of a good investment decision. For Options traders it is everything. Well, for its worth we will put our best estimate to this prediction. By the end of the year we still expect to see gold trading above $1000/oz and by April 2009 it could very close to the $1500/oz mark. Our necks are on the block along with our money.

Speaking of money we still have some ‘opportunity cash’ on the sidelines, which we will deploy as soon as we have done the work to identify the vehicle that offers us the best value in order to take advantage of this end of year rally.

Have a good one!

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Reader Comments (3)

The same Merrill Lynch who thought sub-prime loans a sound investment? Wait for April Fools day to offer them as a resource.

Perhaps a dart board with different gold values on it. A dart toss of $1200 likely has as much wisdom as Merrill and is at least honest.

I will spend my research time with sources that I have respect for, such as your review of Endeavour.

October 15, 2008 | Unregistered CommenterBC

I am certain we are in a major wave 2 correction and although the metal may have put in a A bottom the stocks may have not. Jim Rogers nailed it when he said, "this is just an outright liquidation".

He is also correct in saying once this liquidation is over only stocks where the fundamentals are intact will be leading the market. Those stocks will be PM stocks but it is not over yet.

980 gold by dec 08 and 1250 gold by apr 09 are my price targets. The fundamentals for inflation won't take place until early summer and the next dollar swing not until dec at the earliest.

Remember, Paulson leaves in Jan so he will extract every last dollar and every last minute of profit for his buddies until he leaves. He has demonstrated no regard for the citizens of the US, world economy, nor sustainable of necessary raw aterials. Everything he has done is for wall street to profit or recover any dollars they can and he will sit on gold until he leaves, For this I am certain of.


October 16, 2008 | Unregistered CommenterKevin Merry

please update me latest targets and explanations

March 7, 2009 | Unregistered CommenterRavikumar

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