Gold Won’t Reach Peak of $3,878/oz. for 8 to 9 Years: Jeddeloh
February 10, 2010 by Editor · Leave a Comment
Gold should come down to about US$1,030 before moving forward to a peak of US$3,878 per ounce in 8 to 9 years time. www.FinancialPost.com; By: Jonathan Ratner; Words: 461
In further edited excerpts from the original article* Ratner goes on to say:
So says Larry Jeddeloh, the founder and chief investment officer of Minnesota-based TIS Group, which acts as sub-advisor for the Omega Global Opportunities Fund. He is of the opinion that gold price overshot a bit when it got to US$1,226 recently. He looks for gold exposure primarily through equities and his current global research model targets a tactical weight of more than 10%.
US Dollar to Continue Downwards
Jeddeloh, whose Market Intelligence Report is distributed to advisors and institutions with approximately $360-billion in assets under management, thinks the dollar trade re-acceleration downward is about to begin.
One reason he cites is the U.S. Treasury’s recent decision to lift the US$400-billion cap off losses it would take on Fannie Mae and Freddie Mac, which was established when they were put into conservatorship last year. The manager feels this opens up the Treasury to almost unlimited losses for several years.
“I don’t think they would have done that unless they’re anticipating putting a lot more money out to cover those losses,” he says. “We think there is a big money print coming here. This is another example of the fiscal deterioration in the United States.” Either they print the money or raise it in the capital markets. Regardless, it is very bearish for the U.S. dollar, the manager notes.
In addition, with U.S. midterm elections coming in November, Jeddeloh expects the government will put more money in the hands of voters. So while the current discussion centres around tightening credit, he wonders if circumstances will force U.S. monetary authorities to go back to quantitative easing.
“They might have to go back and actually start reflating again, well before anybody thought,” the manager says. “When the market gets a hold of that, then I think the U.S. dollar starts down again and you get commodity prices across the board, including gold and oil, starting to run.”
Oil to $100 in 2010
Jeddeloh expects oil to rise above US$100 per barrel in 2010, partly because of the global economic recovery and also due to geopolitical issues. “We wouldn’t be surprised at all if some of the Western countries were involved, for instance, in trying to destabilize Iran and turn over the regime — which by the way is not bearish for oil. This is going to be the year when Iran is going to come to a head.”
*http://www.nationalpost.com/scripts/story.html?id=2443485#ixzz0eOzOSmKm
Editor’s Note: The above article consists of edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered. (editor@MunKnee.com)
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