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Consensus points to higher gold

I do not yet know how our weekly poll question results about whether gold has peaked out at $1,000. However, those individuals who took the time to send me e-mails with their views are almost unanimous that gold has further to go on the upside.

That is perhaps not surprising given the fact that it has been ascending since 2001 from the middle $250s an ounce. Those who bought then have made a lot of money in eight years.

Had we had the technology to conduct a similar poll in the weeks immediately before the high in 1980, the results would probably have been the same.

Similarity to 1980 does not mean that the present views are in error, but it is sure important to note the fact that nearly everyone who responded at some length holds the same view.

Even this week’s issue of Barron’s, which usually covers Wall Street, was bullish on gold.

Someone who didn’t share the consensus view forecast a gold decline later this year rooted in another dip lower for the economy generally.

Will this overwhelmingly positive majority prove to be right?

There are many people who seem to be both financially and emotionally invested in the answer to that question.

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2 Responses to Consensus points to higher gold

  1. A Collector says:

    I was hoping your prediction of a gold decline to the $600’s by year-end was going to be right, Dave. That would make the coins I want to buy quite a bit cheaper. Now, however, it’s looking like I should have bought them a while back, because now they are doing nothing but going up every other week. Sigh.

  2. Mark says:

    There are similarities to 1980, but many differences as well. In 1980, the Fed raised interest rates to very high levels which made risk free money market accounts paying 18% very attractive. Also, the US was able to flood the gold market at that time which suppressed the price. The US does not have the gold on hand to flood the market, and even if it did most of it would be bought up quickly so the price might dip temporarily, but that dip would be short lived.

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