Meanwhile, gold continued its record-breaking run with December gold touching the $1070 an ounce level, the highest ever. The metal is up 19 percent this year, heading for the ninth straight annual gain, while the dollar has dropped 6.6 percent against a basket of six major currencies, since the beginning of the year.

New York crude surged and November light sweet traded above $78, smashing through a key technical resistance level of $75 per barrel. Gasoline inventories more than reversed the previous week's big build as demand for gasoline continued to increase on a year-on-year basis. US crude oil inventories rose by 400,000 barrels last week, lower than most analysts' expectations of 600,000 barrels. However, no meaningful correction will be possible without a strong rebound in the US Dollar, whose sharp decline has been the cause of the recent gains as traders look to crude as an inflation hedge. Technical's indicate that the price of crude is very strong at the moment and with prices clearly above significant resistance at the top of a rising channel, the next short-term price target is the $80 level.

Bullion probably will top $2,000 in the next decade, investor Jim Rogers said in a Bloomberg Television interview. He also told Moneynews that, "The dollar is a terribly flawed currency" Frankly; I think he is absolutely right. And, as far as the greenback is concerned, it look that there is nothing at the moment that can alter this downward pattern, and I believe that the Dollar Index is headed to 71.

As I have mentioned a few times, the implications for gold market from breaking above $1000 is a major event. It is extremely bullish and is a sign for investors that the global monetary problems arising from mismanaged fiat currencies are worsening.

Even though the bullion banks are desperately trying to knock the price of gold down, if you still can't see the signs, let me explain once more. The dollar is likely to continue to weaken and price of crude is likely to move higher. The third ingredient in this cocktail is gold. And, with a weaker dollar, and higher oil prices, the yellow metal is going to move higher. With regard to the bullion banks, perhaps there is a new payout plan; the larger the losses, the larger the bonuses!

Technicals

Gold has established a rising channel formation. The recent move above $1000 represents a significant breakout to the up-side. However, in the short-term, gold may have run too high too quickly trading above the upper trend line. However, even though it may pull-back to $1025-$1035 level, I believe the price is going to reach $1100 shortly. Therefore any correction will offer buying opportunities.

If you're not in this market you absolutely need to buy physical gold and silver here. Whether it stays above a thousand or drops below is of no consequence for a long-term investor. As it is likely that gold will go to $2,000 or even $ 3,000 or more, if you bought it as it broke through $1,000 and then went back under $1,000 for a while, you might be concerned for a short while, but ultimately it is going much higher in the longer term.

ABOUT THE AUTHOR
David Levenstein is a leading expert on investing in precious metals .He brings over 29 years experience in futures, equities, forex and bullion. And, although he began trading silver through the LME in 1980, when it comes to gold, he has traded gold bullion, gold coins, gold shares, gold ETF, gold funds and gold futures for his personal account as well as for clients. Over the years, David has been published in dozens of publications and has appeared on CNBC and Summit TV (South Africa), and is a regular guest on JSE Direct, a premier radio business channel in Johannesburg, South Africa. He He is also a regular commentator on www.kitco.com and www.mineweb.com David has lived and worked in Johannesburg, Los Angeles, London, Hong Kong, Bangkok, and Bali.
For more information go to: www.lakeshoretrading.co.za
Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice.