Gold May Reach $5,800 Per Ounce … Soon

I just read a very interesting new article by columnist Peter Brimelow in CBSMarketwatch in which he discusses Mary Anne and Pamela Aden’s Costa Rica-based Aden Forecast, a sort of finance newsletter/tipsheet. They are famous for being right about gold in the ’70s but in fact they have a pretty good track record since then too.

The really interesting part is this: while some “experts” are saying that gold prices, now well over $1,000 per ounce, have risen too high already, the Adens are saying that we ain’t seen nothin’ yet. Brimelow explains:

About gold, the Adens note that “gold’s peak in 1980 at $850 is the equivalent of about $2400 in current dollars. Gold has not even approached that level yet and the situation is far more serious now than it was then.”

They conclude:

“The focus now is on the next phase of the current rise. If we continue to use proportions, the bull market’s second rise from 1976 to 1980 gained 750%. Using the same growth and applying it to the current bull market, we could see gold eventually reach $4100 during the next run-up. And if you take the entire bull market gain in the 1970s at 2300% and extrapolate, then $5800 would be the equivalent upside target.”

If they are half-way right, that’s some awfully expensive gold. All sorts of groups, from libertarians to extreme conservatives to religious fundamentalists, etc. are telling their audiences to stockpile gold. They mostly come across as a rabid and crazy bunch, but just maybe, they’re right…

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