$1000 GOLD ON THE HORIZON
John Ing
Gold's bell is ringing. $730 May high will be retested. Upside target remains $1000. Big caps will lead the way. Newmont (NEM) is best technical buy and Agnico-Eagle (AEM) should record new highs.
Ironically, while there is a crisis of confidence in the credit markets, the world is awash in liquidity due the gargantuan current account surpluses of China and other Asian countries as well as the Middle-East. The problem however, is not the supply of surpluses, but the imbalance between the short term and long term obligations of the world's biggest debtor and the United States. As long as there is a lack of confidence in the short term, central banks are faced with the dilemma as to how to supply liquidity. Today, central banks continue to boost money supply but the monetary aggregates were already growing at double digit levels and they had little room to manoeuvre. What is likely then is a dramatic reduction in interest rates which will serve as a short term palliative. But this will not correct the imbalances. Central banks have tried to stabilize the global financial system by pumping large amounts of liquidity into the markets. To date, they have only addressed the symptoms of the underlying crisis. The situation will become even worse.
Where then to find a safe haven? Gold. A drop in interest rates will cause the US dollar to continue its decline against major currencies. Gold counters with the dollar. Gold is ready to break out to new highs. $1000 gold is in the offing.
John R. Ing
Maison Placements Canada
130 Adelaide St. West - Suite 906
Toronto, Ont. M5H 3P5
(416) 947-6040
jing@maisonplacements.com
6 September 2007
The information contained herein has been obtained from sources which we believe reliable but we cannot guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell for the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that Maison Placements Canada Inc. is to be under no responsibility whatsoever in respect thereof. Directors, shareholders or employees of this company may be beneficial owners of the securities referred to herein.
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