Gold going to $US720/oz

I have taken a rest from commodities reporting of late. Understandable given the falls. That is no obstacle however if you want to play with put options or futures. I prefer to use CFDs, and its otherwise given me an opportunity to focus on my property activities, the focus of which has been my latest report on the Philippines property market. The more I looked at the Philippines property market, the more I like it. Refer to my 300-page report, the free book chapter or check out the foreclosures.
Back to commodities! Gold has been weak of lately, having falllen from $980/oz to $780/oz. The market gained some confidence at that point and rallied to $840/oz. I think at this point the market is going back down. Weaker commodity markets are of course due to rising interest rates and weaker demand. Appreciate that commodities are not down for good, nor has there been adequate time for us to see the addition of significant capacity. It will be another 7-10 years before the demand is satisfied for a lot of commodities. This has to auger well for the Australian economy particularly. So why are commodities falling? The reason is (i) rising inflation, prompting higher interest rates, (ii) stronger $US, and (iii) weaker global economic outlook,. This all contributes to a weaker speculative appeal of all metals. Commodities are not going back to their 2000 lows. Rather they will establish support at lower highs. For gold that support is $US720/oz for an entry point, however in a volatile market it could go as low as $694. Its not that I have become bearish about gold, its that I think gold is not going to fly until we see the benefits of the next credit expansion. I have thus deferred my prediction for a $2400/oz gold price. The implication of that is that gold is going far higher. The longer things are delayed will just mean a higher gold price.
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Andrew Sheldon www.sheldonthinks.com