Gold closing in on $500

Posted on November 22, 2005 , filed under Stocks | Print This Post

Check out this excerpt from a Marketwatch article I caught this morning.

Gold for December delivery touched $495.90 overnight before pulling back. The contract was last trading up $4.70 at $494.20.

“The target remains the magical $500 number, but we might see some retracement before that number is reached,” said Alan Plaugmann, sales trader at Saxo Bank.

The precious-metals rally is being driven by institutional and hedge-fund buying, although volume can be expected to thin in the run up to this week’s Thanksgiving holiday, he said.

It sounds like gold will break $500 soon. As I indicated in my earlier posts about gold, I believe gold is entering the third phase of a traditional bull run. I expect to see a frenzy of speculative buying when gold breaks $500. Once we see analysts who will tout gold’s never ending rise, we will have clearly entered the third phase. Heavy institutional buying, global fears over bird flu, terrorism, and positive consumer sentiment about gold as an alternative currency, will fuel an 80’s like speculative third phase bull run.

Gold is currently trading at $491

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