Thursday, October 7, 2010

Citigroup (NYSE:C) Raises Gold Estimate to $1,450

Citing expected quantitative easing, which is another word for inflation, to be instituted by the Federal Reserve, Citigroup (NYSE:C) sees gold prices over the near and medium term to rise to $1,450 an ounce.

That is based on the accurate assumption the value of the U.S. dollar and other currencies will fall against gold as they continue to be debased from the faulty policies of their central banks.

Gold, as expected, is experiencing a pullback today as it had been moving up at unsustainable levels, where investors were over-pricing the future into the precious metal.

Gold for immediate delivery did surge earlier in the session to $1,364.77 before falling back.

Whatever type of correction may come, it's largely irrelevant for gold investors, as there is absolutely nothing in the way at this time which will change the support underlying the surge in gold prices.

News of the ongoing sovereign debt crisis in Europe being worse than being spun by the mainstream media is part of that support for gold, along with expected inflation, weakening currencies, low interest rates, and numerous other factors.

A basket of currencies falling against the price of gold is among the more important supports that will continue because of the enormous printing of money.

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