Will Gold Hit $1,600 Soon? (GLD, AU, ABX)

According to independent metals consultancy GFMS Ltd., gold has the very realistic chance of hitting $1,600 an ounce this year, and seeing the continued strength in the yellow metal makes one think it might happen sooner rather than later. The price of gold is expected to break $1,600 before the end of 2011, as continued supportive and loose monetary policy from the Federal Reserve, as well as concerns over the stability of the economic recovery in developed economies, especially in Europe weigh on investors fears. Currently, the dollar is around 2008 lows, and gold appears to be coming back into favor, as a currency, after being out of favor for a century or so. Most people expect QE2 to end, but some are expecting the Federal Reserve to maintain the size of its balance sheet for some time, which would contined to be supportive of gold. We heard earlier this week that Kyle Bass helped his alma mater, the University of Texas, take delivery of a tremendous amount of physical gold, as investors continue to believe in a devalued currency. Names like Barrick Gold ABX, the SPDR GLD Trust GLD, AngloGold Ashanti Limited AU and other gold miners will continue to report record earnings, as the price of gold goes ever higher. As of the time of this article, gold was around $1,510 an ounce. $1,600 is well within reach, and it could come sooner than any of us think.