Gold $800 Average in 2008

Gold Climbs to Record as Investors Seek Alternative Asset
article written date: Jan-8-2008

asr note: when Oil touched 100 week ago it should have been good short, after a week it touched 95 yesterday before raising to 97 , 95 good to get out.
note2: at 880 Glod is good short to get out at 850 in 2 weeks .. with max. possible of 900

Gold futures for February(2008) delivery rose $18.30, or 2.1 percent, to $880.30 an ounce
$800 Average
Gold will probably average $800 an ounce this year, compared with $696 last year, according to the median estimate of 37 traders, analysts and investors surveyed by Bloomberg News last month.

Gold was the second-best performing metal after lead on the UBS Bloomberg Constant Maturity Commodity Index last year. The index of 26 commodities climbed 22 percent.

Investment in the StreetTracks Gold Trust, the largest exchange-traded fund backed by bullion, reached a record 630 metric tons on Jan. 4. That's about a quarter of annual mine production.

Global output fell to a 10-year low of 2,477 tons in 2006, according to the London-based research company GFMS Ltd. Supply from South Africa declined 7.5 percent to the lowest since 1922 as companies were forced to dig deeper and pay workers more.

Gold's 5 percent gain so far this year may be overdone, some analysts said. The 14-day relative index for gold futures touched 73 today. A reading above 70 generally means the price is headed lower.

Speculator Holdings

Hedge-fund managers and other large speculators increased their net-long positions in New York gold futures in the week ended Jan. 1, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 199,438 contracts, up 8 percent from a week earlier, commission data show.

``The easy money has been made in gold,'' said Sutherland of Financial & Investment.

Goldman Sachs International Group Inc. economist James Gutman, who is tied as the most-accurate analyst in the London Bullion Market Association's 2007 gold-price forecast, wrote in a Dec. 11 report that gold will drop to $790 in six months and $750 in 12 months.

``As the U.S. dollar gains strength once again, the price of gold will, in turn, likely decline,'' he wrote in the report. The bank recommended selling December 2008 gold futures. The bank was the second-largest holder of the StreetTracks Gold Trust ETF, according to a Sept. 30 filing with the Securities and Exchange Commission.

Silver for March delivery rose 53 cents, or 3.5 percent, to $15.82 an ounce. The metal rose 15 percent last year.