Finally!!!Someone to come out and say that the USA is headed for a long term bear market... this from Kitco site, read on.
Regards, DH
SAN FRANCISCO (AFX) - Gold futures closed above 400 usd an ounce for the first time in two weeks Friday, logging gains of around 2 pct for the session as well as the week, as disappointing US employment data sent the dollar sharply lower, dealers said.
"Gold has been held back on the falsehood that the US economy was booming; which in turn, would make interest rates rise sharply; which in turn, would make the U.S dollar fly; which in turn, could only be bad for gold," said Peter Grandich, editor of an investment advisory publication.
However, July's payroll growth of 32,000, "combined with several recent economic indicators, should put this fantasy to bed," he said.
That allows "the reality of horrific multiple U.S. deficits, a worsening energy crisis, a geopolitical landscape that must get worse before it can get better, and a polarizing national election ... to give the support gold needs to go to new highs and challenge 500 dollars in the next 12 months or less," he said.
US hiring slowed for a fourth straight month in July, the Labor Department reported earlier Friday. It was the slowest job growth of the year.
Frederic Panizzutti, an analyst at MKS Finance in Geneva, called it a "collapse." He said that the dollar's pullback "acted as a catalyst for gold and silver, and both rocketed higher within minutes, ignoring any resistances on their way."
As traders scrambled for a safer investment, gold for December delivery climbed 7.30 usd to close at 402.10 usd an ounce on the New York Mercantile Exchange. The contract is up 8.40 usd for the week; it has not traded above 400 usd since July 22.
The small amount of new jobs created in July "will make it difficult for the Federal Reserve to raise interest rates," said Todd Hultman, president of Dailyfutures.com, a commodity information provider.
A slower climb in interest rates would be "bearish news for the dollar and bullish news for gold and the euro," said Ned Schmidt, editor of an investment publication of Schmidt Management.
Hultman said prices for gold are likely to reach 450 usd by the end of this year.
Other metals futures closed mainly higher, taking their cue from the strength in gold.
"US equities are in for a long, long bear market that will take out the bear-market low for the Nasdaq," said Schmidt.
Against such a backdrop, the "only place for North American investors to find future returns is gold, silver and euro-denominated bonds/deposits," he said.
Also on Nymex, September silver rose 2.5 cents to close at 6.775 usd an ounce. October platinum closed at 832 usd an ounce, up 4.70 usd, and September palladium gained 60 cents to end at 214 usd an ounce.