Ladies and Gentlemen, Here’s the $1,000 Gold!

gold bar

Just when you think the stock markets might have turned the corner (stocks gained the most in five years on Tuesday and S&P issued a statement yesterday saying the end is near for subprime related writedowns), another bomb dropped on the Wall Street today: Bear Stearns, one iconic company on the Street, needs emergency funding from JPMorgan Chase and the Federal Reserve Bank of New York to stay alive!

That news didn’t do any good to the stock markets which gained a little at the open after a mild inflation report from the government. Stocks dropped more than 300 points at one point and eventually closed almost 200 points down, giving up all the gains of the week.

As stocks got pounded, commodities surged and spot gold broke the $1,000 mark for the first in history (BTW, oil also reached a record $110 a barrel)! It was just six months ago, when gold was around $750, the manager of Tocqueville Gold Fund (TGLDX), that fund that I own, predicted $1,000 gold. And now, here we are, $1,000 gold!

*Photo from Goldinvestingsource.com

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13 Responses to “Ladies and Gentlemen, Here’s the $1,000 Gold!”

  1. Lazy Man |  Mar 15, 2008 at 7:35 am

    Wait, someone with a biased interest predicted $1000 gold? Crazy. ;-)

  2. Sun |  Mar 15, 2008 at 7:48 am

    May he sees something we don’t see :D

  3. Kristin |  Mar 15, 2008 at 11:53 am

    1000 dollar gold was inevitable – the traders were rooting for it.

    We are not out of this cycle, yet. More bombs will drop for the market – what is his next prediction?

  4. Sun |  Mar 15, 2008 at 12:13 pm

    Yes, the commodities like gold, silver, oil, can still go up. Late last month, CALPers, California public employee retirement system, decided to boost its investment in commodities from $450 million last year to $7.5 billion in 2010. That’s an increase of 16 folds!

  5. wbbgjr |  Mar 15, 2008 at 3:36 pm

    With the Federal Reserve attempting to bail-out the banks for their fraudulent behavior the past few years, inflation is going to be unbelievable in the next few years. The price of gold these days is just reflecting everyone realizing that the U.S. government is not interested in protecting the purchasing power of the Dollar.

    If you guys are concerned about this please sign this petition.

    http://www.financialpetition.org/petition-new.shtml

  6. ongrowthtrack |  Mar 17, 2008 at 10:36 am

    This is going to be short lived, any one can look back at the historic prices and see that for oneself.

  7. Sun |  Mar 17, 2008 at 10:38 pm

    ongrowthtrack: I agree that speculation plays a quite large part in gold’s rapid price gain. However, I don’t think we can just look at what happened in the early 80s and predict that gold will fall as hard as last time. The environment is different now from before. Investors, institutional and individual, are buy gold as a diversifier and to hedge against weakening dollar, and demands for gold remains strong. Sure, when the current
    financial crisis is over, gold price could pull back, but I don’t feel it will enter an extended period of depression.