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Gold Still On Its Way To $5,000

Tuesday, August 23, 2011 - 10:15 AM
From Marvin Clark - Seeking Alpha
It was on August 20, 2010, a year ago; that I wrote the article “Will the Price of Gold Reach $5,000.” That Friday, gold closed at $1,228.00 an oz.

To summarize, the reasons I believed gold would rise to $5,000 an oz. included the following:
  • The US would lose its AAA credit rating within two years
  • A global recession would find developed nations unable to service their debt
  • The Chinese economy is not large enough to prevent a global slowdown
  • Financial insolvency would begin appearing at the state and municipal levels
  • US debt would be abandoned by foreign investors
  • Corporate profits would continue robbing the economy of disposable [wage] income
  • The US dollar would continue to lose value relative to gold
  • Gold would become a de facto world reserve currency
  • New wealth in the Emerging Markets would push outward gold’s supply/demand curve
  • Social unrest and political instability would make gold a safe haven for wealth
  • America’s only long-term remedy for its financial woes is pursuing a transformative “next new thing.”
  On Friday, August 19, 2011, gold closed at 1853.10. That’s a 51% increase.

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