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Published on: 2/10/2008
Last Visited: 2/10/2008
BOCA RATON, Fla., /PRNewswire/ -- Yesterday gold rose 3.3% in London to $861.10 a troy ounce, surpassing the previous high of $850 reached in January 1980, a result that was predicted by James DiGeorgia, editor and publisher of the Gold and Energy Advisor newsletter (www.goldandenergyadvisor.com).
"If you're a stickler, I missed my target predicted price for 2007 by two days," says DiGeorgia.
Traders reported consistent selling pressure on gold throughout December, but DiGeorgia says, "This indicated investors were booking profits before the year-end and not turning negative on gold.Today's surge in the price of gold would seem to prove my analysis correct."
Analysts are saying the surge in gold is as a result of both a weaker U.S. dollar and the poor influential ISM manufacturing survey numbers released yesterday that indicated industrial activity contracted in December.This weakness is fuelling fears that the U.S. economy could be dragged into recession.
"I think that assertion may well be accurate, but it ignores the bigger picture problem," continued DiGeorgia.
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According to DiGeorgia, that strategy should be complimented with healthy tax cuts and reduced government spending, but that neither is expected during this election year.This may change as the threat of a recession becomes more compelling and as Election Day 2008 approaches.
"If nothing changes and the current economic course of direction is uninterrupted we're very likely to see a period of stagflation.In such a scenario we'll see $2,500 gold, $5,000 platinum, and even $150 oil as a consequence.We may also see stocks bounce back and even break Dow 15,000, 17,000 - even Dow 20,000.But keep in mind that the zeros added will be fueled by a weaker and weaker U.S. dollar," concludes DiGeorgia.
About Gold and Energy Advisor
The Gold and Energy Advisor is a monthly newsletter that covers the precious metals, and energy markets with the single goal of delivering money making recommendations to its subscribers.Gold and Energy Advisor is edited by James DiGeorgia, who has extensive experience in precious metals and the energy markets, and is considered one of the world's foremost authorities in both, having been frequently quoted in The New York Times, USA Today, Financial Times, Money magazine, The Chicago Tribune, and Barron's.DiGeorgia is the author of the popular books The Global War for Oil and New Bull Market in Gold.