Lombardi Financial first turned bullish in 2002-2003 and has remained
so ever since. Although at times the bullion has had a rough ride,
metal prices have turned around significantly after first breaking above
$400.00. I believe the spot price of gold can easily creep up to $1,500
in the near term; as early as in the first quarter of 2011.
There are some bullish pundits who are even suggesting a $2,000
longer-term target for gold based on rising demand out of China and
India.
For starters, world governments have committed trillions of dollars
to various bailout packages. Those bailouts will have also left a debt
trail of gigantic proportions.
In the U.S. only, about $2.0 trillion of the bailout money has been
procured through auctioning government debt instruments. In turn, the
budget deficit is going to be enormous and, as a result, the U.S.
dollar
is continuing to be weak in 2010. This could continue into 2011, as the
governments financial situation moves deeper into the red. Note that,
the lower the dollar goes, the better it is for gold prices.
In addition, the Federal Reserve has pumped hundreds of millions of
dollars into the U.S. financial sector in an effort to create liquidity,
encourage lending, and entice consumers to start spending again. It
sure is taking time, but all this money is bound to reverse the effects
of deflation and result in inflation, which has always been the best
thing there is for gold prices.
The February 2011 Gold on the COMEX recently broke to a record high
of $1,432.50, well above both its 50-day moving average (MA) of $1,3650
and 200-day MA of $1,243. We are seeing a bullish golden cross on the
chart, goldprices.today with the 50-day MA above the 200-day MA.
The near-term technical view is moderately bullish, but the Relative
Strength has been weakening, which has resulted in the failure to hold
above $1,400.
The simple truth is that gold is a trustworthy and realistic
investment instrument that should be in every investors portfolio.
Golds traditional role as a safe haven has made it the underdog in the
world markets. It is an investment that people turn to only when stock
or bond markets arent performing well, or when monetary policies are
running amok. Yet there is a sense that gold may be increasingly seen as
a credible and realistic investment vehicle and not just as a
safe-haven instrument for parking capital.
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