Spot Gold Breaks to New High
June 18th, 2010 by Skip McGrath
I have written about Gold several times in this blog. Today, gold broke briefly to a new high of $1260 before setteling back to the $1250 range. Most investment advisers who follow gold are predicting $1300 to $1350 within a matter of weeks.
OF course gold can go down as well as up, but the fundementals have never been this positive for gold since just after 9/11. Personally I am using any pullback to add to my positions.
Gold’s rise has been driven by several factors:
- Sovereign debt crisis in Europe and a belief that it will eventually hit our shores.
- Countries such as India, China and Canada buying gold on the open market to increase their reserves. (For example: Earlier This week, the Central Gold Trust of Canada announced it is going to buy $800 million worth of gold).
- Personal gold hording in developing countries
- Purchase of gold by Exchange Traded Funds
- Mining costs are rising. All of the easy gold has been found and miners have to dig deeper and use more expensive extraction methods. Current gold supply is barely meeting demand. If gold buying continues, demand will soon exceed supply.
I have pointed out several times in this blog that I am not a professional investment adviser and you should do your own research, but I am loading up on gold mining stocks (NGD and ASA are my favorites) and Gold ETFs such as GLD and SGOL.
Til next time,
Skip McGrath
Head Geezer
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