What is gold going to peak at?

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So, gold has been contradicting the fundamentals because people have been in panic mode because of the debt situation and gold's price has been following an exponential trajectory. So, just like any other emotion-laden purchasing of a given commodity, the gold bubble is set to pop. What is it going to peak at, what will it bottom out to, and when will it peak and when will it bottom out?

Here's my speculation.

The gold price MIGHT rise to somewhere between 1900-2300 or it might stay where it's at. Afterwards, it'll crash once people realize that the markets are still working and you can still buy a loaf of bread for under $3 despite heavier debt loads, and I'm suspecting it'll crash somewhere between 500 and 1300. (600 is it's production price, so I'm going a little lower than that and 1300 is its year-ago price before people went into metal-mania.). It'll peak somewhere within the next month or two, and the crash might take upto a month or upto six months.

Currently, I'm invested in GLL, which effectively shorts gold.

An answer would be a guess. Honestly I have no idea. I think it will go down for some time, then up a bit
again, and then stagnate for a period.

Eventually I think it will remain one of the best investments. But eventually could mean in a decade from
now, or more. I'd love to have a better idea about it, of course. But nobody seems to really be able to
predict with any certainty.

I don't have any investments myself, but I have considered it. For now I'll watch.

I think that it will peak at about 2700, but it won't crash because the markets are doing well, it;ll crash when deflation starts to take a stranglehold and the dollar gains strength, the markets are still way over-valued in my opinion, wouldn't touch anything, especially not banking stocks.

The answer to your question depends on how long term you want to think. I don't think that gold will ever significantly decline beyond the odd correction here and there. So it will never peak.

Eh.

People are buying gold because of fears of inflation over currency. Fundamentally gold is a currency [in my opinion]. As long as the euro crisis continues/US inflates the dollar, gold will increase. Also, numerous countries are buying gold and are planning on continuing to do so.

Investors that know more than me: Over a year ago one predicted $2000 for gold. A month or so back another said $2500. With this momentum, both of those seem attainable.

As far as the bubble popping, I think it will, and hit $1200-1500 or so, and then pick up again.

And the bottom being $600 because that's the cost of production... some companies can produce it for about $150 or so an ounce, some produce it for over $1200 or so an ounce.

Edited for two typos.

Edit #2: Hope my reply doesn't come off as confrontational, solely my opinion, and I love hearing differing viewpoints to better understand a situation!

You can't put a valuation on gold. It's always speculative because you buy with the only intention to sell for more without any underlying income (or even possible income) present.
If you have gold, get out and get in equities. Nobody can see when gold has reached its top.

(But if I would have to take a position in gold, going long seems obvious to me because as long as there's uncertainty people are going to buy gold. Just my two speculative cents )

A hundred billion dollars an ounce, give or take a penny or two.

I'll agree with Peter Schiff who speculates that the Dow and gold will meet at some point.

This. Even if the Earth disappears, surely some entities somewhere will continue to use gold as a form of barter, and unless they/we suddenly decide they/we hate it, it will increase in value.

EXCEPT, if someone invents a way to create gold from cheaper material, but once that happens I think the price of gold won't be much on peoples' minds

I don't see a great deal of room for real economic growth in the west, just a lot of wealth transfer going on recently. I think that people are still uncomfortable with fiat and getting more so, I think we are going to see more QE, more currency inflation, everytime the economy tries to take off and create some new wealth we will bounce off a peak oil ceiling and fall back again when the oil price spikes.

The developing world is already buying the dips in the gold market and they are unlikely to ever shift that diversity back to US bonds so I think the dollar price of gold will carry on going up over time.

Well, it looks like gold peaked at ~ $1918/oz. and the crash has commenced just as I predicted.

Too bad I entered short at $1820 instead of $1918, but I guess I can't be perfect. I do wonder if I could've predicted the top a little more accurately, though... based on the articles at kitco.com, I guess the top comes when the technical guys say that it's topped because Elliot wave analysis says so.

I think it is profit taking that is dropping the market, not a fundamental change in sentiment, China and India are still buying the dips and investors are still keeping gold in their portfolios.

Wait until after the addicts inject the next hit of QE and gold will push through $2000.

Not bad if you bought in a decade ago at $256, unless you are English of course and then you should be very, very annoyed that some one-eyed fool of a Scot dumped all our gold for the lowest price in history. It's only $15 billion difference, barely worth getting out of bed for.

I agree that the long-term trend is also up, but by longterm, I'm thinking along the lines of years and at a fundamental price level far lower than what it is currently. The fact is that the price of gold rose far too quickly to be due to "fundamental demand" for gold because those buying pressures have been on gold for more than a month, so most of the price past... 1500 or 1600 or whatever was due to speculative demand. Now that the speculators are undoubtedly going to sell out their positions, you'll see prices bottom out at whatever the "fundamental" price level is. So, personally, I'll go long on gold after it's stabilized at a price level for more than a month.

Last edited by swbluto on 23 Aug 2011, 6:36 pm, edited 1 time in total.

swbluto: If you don't mind answering:

What'd you get your GLL at? How long are you planning on holding on to it?

I got my GLL at $16.11 and I plan on holding onto it until I triple my investment! lol. Actually, I don't know, I assume once it seems reasonably sure that it bottoms out which is when it stabilizes or consistently increases for more than some period of time (Like 7 days or so.), which I'm guessing will happen within the next 6 months.

Using that method, I might actually lose money if it keeps increasing from here, but at least I'll limit my "learning experience" losses.