Dr. Richard Appel remains very bullish on gold. This week he predicted that we will reach the previous gold peak from 1980: "The reason why I anticipate that the next major target for gold is $875 is simple. Among other reasons, it is due to two primary factors. The first is that there are no major areas of resistance between the $500 to $515 range and that point. The other is that conditions have coalesced that I believe will drive the eternal metal to that level if not higher, before a major bearish assault can be mustered."

Richard Russell from Dow Theory Letters agrees with Dr. Appel's bull market prediction: "Gold is now well above the 550 halfway or 50% level of the entire 1980 to 2000 bear market. This puts gold in line to test the 1980 record high of 850. There's no time limit on the test of the high.

Jim Sinclair has become a silver bull and has a startling prediction for the silver market: "The answer to the perennial debate about real silver and paper silver should be answered soon. The key to this answer market wise is $10.50 as major resistance is right there.

The basis of reaching a 22-year high lies in Barclay Global Investor's plan to issue a publicly traded exchange listed Silver Fund. If this Fund is sizeable and buys real silver bars the impact could be significant. However, if this Fund specializes in paper silver it will only become another tool of COT. Is Barclay going to fight COT? That seems most unlikely, but we shall see.

My feeling is that the funds that ETFs and Hedge funds have in gold have only served to muck up the waters. They have so far made fools out of themselves long on the top and short at the bottom. Gold is too violent at present prices, meaning that in time $150 to $250 ranges in a single day can be expected. Silver will have $5 between the bid side and the nearest offer. Now will that make life easier?

I do not cheer the formation of the first EFT of significance in silver. The market is cheering but real bullish joy only comes at a close above $10.50."

Ed Bugos from the Interim Market Update wins the Gold Bug award this week with his $2,000-$3,000 gold forecast: " I am bullish enough to say that the market will probably move to the high end of my target ranges (i.e. XAU=200; HUI=400; Gold=US$633), but this is no science to begin with. Anything beyond those figures is outside the scope of any kind of measurement - technical, fundamental, historic - in my arsenal, at least for the near term.

Now, when I suggest taking profits on this stuff, even while arguing for gold to rally into the $2000-3000 range ultimately, I have a specific investor in mind: that is, anyone looking to minimize their downside during the inevitable PRIMARY correction.

Wherever the peak will be, whether US$600 or US$800, it will happen in the next few months, and after that a correction of up to 30% in gold prices, and up to 50% in the HUI would make a good fit for the historical model that has served us well up to this point."

Bottom-Line

Our Gold Bug of The Week Award, goes to Ed Bugos for his target of: $2,000-$3,000. When we take the average of all of our intermediate term pundit estimates this week we find a single price target of, $786 or about $200 higher than the current gold quote.

In last weeks article I wrote, " Gold was unable to confirm the record closes in the previously lagging XAU and silver markets. This indicates that precious metals will likely begin to consolidate next week."

The gold and silver consolidation came to pass. All eyes should be on the gold and silver consolidations. Next week will tell if the gold stocks will lead the metals lower. Don't be surprised to see extreme volatility, powerful swings up and down at this stage of the bull market.

Chris Waltzek

cwaltzek@comcast.net

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