An Undeterred Gold Bull

Gold analyst Jeff Nichols seems undeterred by the December drop, as this opener to a Mineweb piece makes clear:

Gold has enjoyed a long and enviable climb, rising some 380 percent from a cyclical low near $255 an ounce in April 2001 to an all-time high just over $1,225 early this month. Nevertheless, the bull market in gold has a long way to go - both in magnitude and direction.

Looking ahead to 2010, don't be surprised to see gold trade at $1,500 or higher sometime during the New Year. And that's not all: I've been telling clients that the yellow metal's price will continue its long-term upswing for at least a few more years, very likely reaching $2,000 an ounce . . . and possibly hitting $3,000 or more before the gold price cycle begins its next long-term cyclical "bear" phase.

One point that can be taken from his piece is the much-feared Fed rate hike may not be as bad for gold as has been assumed. In his words: "As long as the rise in U.S. inflation outpaces each incremental increase in nominal interest rates - so that real interest rates remain near zero or in negative territory - monetary policy will be too accommodative and impotent to stem the rising tide of inflation."