The Stimulus Effect: Including $1 trillion in cash infusions, the stimulus proposal will pump $9.7 trillion into the economy, according to Bloomberg. As the Globe & Mail reports flatly, "Many believe that the monetary stimulus efforts will cause a spike in inflation," driving gold higher and higher.
COMEX Traders Predict $1,600 Gold by December: If gold trades at or above $1,600 by December, some 100,000 call option contracts will be "in the money." Big-money players Goldman Sachs and JPMorgan are apparently helping to drive the action, ahead of a huge purchase of gold futures contracts.
"Big Money" Inflows: In 2008, NYC-based hedge fund Paulson & Co's flagship fund returned 37%, as the world markets crashed bitterly. Paulson's is extremely bullish on gold, including the March 17 purchase of 39.9 million shares of AngloGold, worth $1.28 billion. Other major hedge funds are buying up gold, too, including Eton Park Capital, Greenlight Capital and Hayman Advisors.
China's Doubling Down! China just revealed that it has doubled its gold holdings to 1,054 tons. Yet that still barely equals 1.6% of its overall reserves. As China moves out of U.S. Treasuries and into gold, this will help fuel the subsequent leg of the run-up.
Demand Building across the Board: Global demand for gold jumped by $29.7 billion in the first quarter, a 36% bolt, according to the World Gold Council. Demand for gold ETFs (Exchange Traded Funds) rocketed 540%... another trigger for the imminent gold boom.
The Paper Dollar's 30% Drop: Since 2001, the U.S. Dollar Index has tanked 30%... while gold has risen 300%. With all the downward pressure on the dollar, and inflation on the way, this trend is about to really pick up momentum
Gold/Dow Ratio Signals $8,000 Gold: During major gold bull markets (and corresponding equity bears), gold and the Dow converge at a 1-to-1 ratio. During the last gold bull, the Dow sank to 850 and gold rose to $850. The Dow is now over 8,000... But even if it fell to 4,000, we could see gold at $4,000 an ounce before this bull run comes to an end.
U.S. Treasury Dept. Signals $5,468 Gold: Currently, the U.S government holds about 286.9 million ounces of gold. It has printed about $1.569 trillion worth of paper dollars. If each dollar had to be backed by gold, that would put the current price of gold at a whopping $5,468.80 an ounce.
Riding the "Commodity Super Cycle": Jim Rogers expects the Commodity Super Cycle to drive commodity prices higher for at least another eight years...and that include gold. Roger's is stockpiling the yellow metal by the day. Every pullback, says Rogers, is another buying opportunity. Considering he's been correct on every major trend of the past 40 years, it isn't wise to bet against him.
Historic Model Predicts $6,214 Gold: During the last gold bull, the yellow metal ran from $35 an ounce to $850, a phenomenal 24-fold increase. This bull started with gold at $255.95, meaning that if historic trends hold, the price target could reach $6,214 an ounce.
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