RE: GLD numbers change againGold seen breaking $500 in 6 months - Sacks
By: Allan Seccombe
Posted: '29-NOV-04 04:00' GMT © Mineweb 1997-2004.
SAN FRANCISCO(Mineweb.com) -- Gold could break through $500 an ounce and keep going higher, Richard Sacks, the president of Phoenix Advisory, said on Monday.
He painted a woeful picture for the dollar, while giving gold a glowing outlook, during the Gold and Precious Metals Conference in San Francisco. He told Mineweb later that gold could test $480 an ounce before breaking through to $500 in six months.
“I see gold going north of $480 over the next six months and clearing $500 an ounce,” Sacks said. Gold broke through $450 on Friday.
“How much further it will go is a function of how quickly the world begins to become more uncomfortable with their massive dollar holdings.
“These are psychological factors that are hard to estimate, but the underlying fundamentals of the dollar are deteriorating and the financial imbalances are worsening. As long as those conditions prevail the weight of the evidence suggests the dollar is going nowhere.”
The U.S. dollar index pulled to just below 82 on Friday, with the next chart point of 71, with a long-term objective of 51.
The gold price has a tight inverse relationship to the dollar, but the price is also being driven by strong fundamentals.
Supply is nearly static at 2,500 tonnes a year, but there is strong demand for gold in exchange-traded funds in the United States, Britain, Australia and South Africa, rising demand from China and strong buying in India and the Middle East. Gold is also resuming its monetary role, he said.
“The wind is at gold’s back.”
Sacks recommended four gold stocks that he favoured. They were Newmont, Crystallex, Nevsun Resources and Sunridge Gold.
Phoenix has investments of $150 million in gold shares and U.S. debt, and Sacks is a regular speaker at mining conferences.