CT Programmer

UBS Analyst Raises Gold Stocks' Price Targets on Higher Gold Price Forecasts

This week, the dollar rallies and gold sinks. Next week, the dollar slips and gold rallies. And each week you can hear the arguments for either side flip-flop back and forth. My belief is you can dig up an analyst that says just about anything.

The long-term trend is that our Fed is going to sit on its hands leaving rates where they are for a good while --- maybe start raising them a little. They may talk the inflation-control talk, but they don't walk it. They're still too worried about growth and liquidity. Meanwhile, countries across the world have been dealing with double-digit inflation and high growth that is going way too fast, and if they themselves don't do enough to suppress growth by raising rates (and not just by 1 point, but by 3-6 points), commodity prices will do it for them. Plus, the ECB is already raising rates. So you've got the rest of the world putting the brakes on and raising rates, commodities driving up the price of everything, and the US holding rates steady and running the presses full speed. You tell me what that will do to inflation in this country? Still think gold is going to come down? These are long-term trends that take years to play out, not day-by-day analyst whims.

Also, why on earth would "fireball" think that gold would have any kind of use or value whatsoever if governments and all of civilization comes crashing down? I'd stock up on canned goods, water and bullets before I stocked up on gold for an Armageddon scenario. Gold has value in a market, but not in a society where the market collapses. Gold, like diamonds, in itself is nothing but a luxury good. You can't eat your gold. But, assuming that society holds for now and you can cash in, I'd say you've got a nice retirement plan going. ;-)