some expert opinions on gold, from CBSMWatch
Lundin, Turk, Doody, Grant
Grant is probably the premier bond/economy mind in USA
back home from 10-day vacation
being in NewEngland was like being in a warm home
being on CapeCod was like being in heaven
/ jim
On Monday morning gold rose to $323 an ounce in the spot market, not far from the $329.30 reached May 31. The metal disappointed gold newsletter editors during the summer, when stocks hemorrhaged. Now, investors say global events will boost bullion prices.
"The gold market is now apparently disregarding stocks to some extent and -- with the drums of war beating more feverishly and the 9/11 anniversary racing toward us -- is beginning to give greater weight to geopolitical risks," says Brien Lundin, editor of Gold Newsletter.
Lundin, who each year stages the New Orleans Investment Conference (http://www.neworleansconference.com/) in November, says the metal's big test will be $325 and ultimately, $330 an ounce, a level not seen since October 1999. "We'll see over the coming sessions whether this latest show of muscle from gold has the necessary sustaining power," he says.
Observers nearly all point to $325 an ounce as a kind of test for the metal, which along with government bonds are this year's biggest-gaining investment class.
"I'm still looking for a probe of and then a break above $325 this month or next," says James Turk, a longtime newsletter editor and founder of payment system GoldMoney.com. "That will mark the clear beginning of gold's bull market." Turk's six-month target, once gold hurdles $325 an ounce, is above $400.
John Doody, of the revered newsletter Gold Stock Analyst, has just completed a study of gold during the Gulf War. Gold staged its biggest gains -- about $68 an ounce from the lows, or 20 percent -- in the weeks just before Aug. 2, 1990, when Iraq invaded Kuwait, and in the three weeks after.
"The gold price was in a decline the first half of 1990 despite Saddam's increasing threats against Israel, including use of chemical weapons," Doody notes. "By mid-June, Iraqi troops were being gathered on the Iraq/Kuwait border and Saddam's possible sinister intentions drove gold higher. The price spiked $10 an ounce (higher) on Aug. 2 as Iraq invaded, and gold hit $414 an ounce three weeks later."
Doody said he expects a similar price gain "as tensions heat up, but this time the fear will not be Saddam's (Iraq leader Saddam Hussein) army, but his possible early use of chemical weapons." President Bush on Monday was trying to persuade Canada to join the White House war on Iraq.
Not everyone is tying gold's future gains to the Middle East. James Grant, of Grant's Interest Rate Observer, says gold almost certainly will gain as investors lose faith in Fed chief Alan Greenspan and his waning abilities to inflate the economy.
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