The price of gold could hit $850/oz in 2007, as investors will continue to increase their holdings in gold and other commodities, according to TheBullionDesk.com analyst Ross Norman.
Gold is now in the longest bull market since the Midas metal was released from its ties to the world's monetary system in the early 1970s and became available for trading as a commodity, and most analysts believe this trend will continue through 2007. One analyst is even forecasting a spike to $850/oz (basis the London PM Fix), the all-time-high recorded in 1980 during the 1977-1980 bull market for gold.
So far, gold has benefited from an influx of investor dollars - particularly by hedge funds - in reaction to weakness of the dollar and deteriorating political conditions in most parts of the world. In addition, there has been growing physical demand for gold worldwide, while mine production has not kept pace. Indeed, global mine production has reached its peak and will start declining, according to statistics compiled by some of the leading analysts.
After experiencing a bear trend from 1997 to 2001, during which the gold price plummeted to a low of $252.80/oz - the lowest in 20 years_gold started an uptrend in earnest in 2002. Each year the market has been making higher lows and higher highs, touching a high of $725/oz in 2006 - the highest level since 1980. And gold seems poised to move even higher this year.
Author : Jim Sinclair
