Calls For $1500 Gold, From Two Different Strategists

The first once comes courtesy of TheStreet.com. John Embry, Chief Investment Strategist of Sprott Asset Management, calls for US$1500/oz by "'early next spring.'"

In and of itself, this forecast isn't that surprising because Sprott has long been associated with the goldbug world. More surprising, at least to me, was a report from Bank of America/Merrill Lynch with the same number (although with no specific timetable.) According to this report, available as a .pdf file, gold's in three stages of a bull run. The first stage was caused by the credit crisis, and the current (second) stage is being driven by greenback devaluation. The target for the second stage is $1200, which has almost been reached. The third stage, according to the report, will be driven by commodity gains resulting from global recovery. That stage should push gold up to $1500.

It looks like $1500 is becoming the new $1200. On a ratio basis, using $1180 gold as today's price, $1500 is as optimistic now as $1200 was when gold was at $944.


[h/t: I got the report from a download link on this FreeRepublic thread, which cites a goldbug-compatible phrase therein: "The point of fiat currencies is to debase them as needed."]