Well the COMEX price of gold per ounce has been flirting with $1300 for almost the whole month now. Today it finally crossed over. The greatly boosted the price of my Barrick Gold stock (ticker symbol ABX). Gold stocks have strangely not done quite as well over the same 30 day period. Market pundits would say that this reflects market sentiment that Gold is going to fall back once it hits the $1300 mark. So people bought gold stocks in anticipation of gold hitting $1300 and sold them off as the price of gold got closer- a classic case of buy the rumor, sell the news.
From my experience watching this market, gold will in all likelihood retreat from it’s new high, but I’m thinking it’s new high might be a bit higher than $1300. $1325 to $1350 seems like where it might stop and fall back. Of course, when that happens, people will say that gold is finally starting to collapse and return to where it was ten years ago. These people will be proven wrong when gold hits yet another high another six months down the road. Gold is in a long term bull market and will continue to be for some time. It’s hard to say when, but I don’t see the price of gold coming down anytime soon with the US government running trillion dollar a year deficits and the Federal Reserve undertaking quantitative easing (AKA printing money) in order to stimulate the economy.