RE: Where is POG going?Good questions Renin. Some good commentary on this board. Welcome to Oilpro and BobbyOrr as new Cat Shareholders.
If I can give MHO on gold and oil. Lets assume we are in a primary bullish trend for gold here and now since 1999. There have been 3 major commodity precious metals bull markets in history that I am aware of and can last anywhere from 11 to 20 years. Adjusted for inflation, gold should be at $2000 now. Oil adjusted for inflation should be at $100. MHO we have a long way to go. In the 70's Gold went up 600%, then went down for 2 years over 50%. Later it got back on track and went up another 800%. Physical gold has a supply deficit of about 1500 tonnes per year right now. This has been met with central bank sales and leases. This activity is ending and bundesbank and others have refused to sell their full quota allowed under the Washington Accord for period just ended in late 2006.
For the current correction in oil .......Goldman Sachs Commodity Index, which is the biggest and most followed has just cut the energy portion by 50%, which causes all funds mirroring those indexes sell indiscriminently. Warm weather helps excacerbate that selling also. There has not been a major oil discovery in 35 years and the demand is steadily growing. ( I don't have the numbers at my fingertips)
There are alot of reasons and facts supporting higher gold and oil and this is too small a space...but one other large item is the wars in Iraq, Afganistan, Sanctions on Iran, Israel and Palestine. Any conflicts there could end with Iran blowing up the Straight of Hormuz or refusing to sell oil to West ( once they get contracts in place for majority of production with China etc ) Iran is #2 Opec producer. Iraq oil production is below capacity compared to when Saddam was alive and any escalation in war could mean attacks on oil facilities. Too many reasons for oil to go higher.
Corrections are temporary, and Gold will go over $1000 with ease...oil is projected by those same Goldman Sachs people to see $100.
long post..my apologies.....
cheers