Gold Rise on Schedule - Is $1800 Gold Now in Summer Cards

Last week I expressed suspicion over the fact that the gold price hadpulled back for no real apparent reason.As the entire world seems tobe lining up to confront the "default or print" options for endingcredit crises, gold dropped to a level $95 below it's recent high.

Inexamining the charts and trading activity over the last couple longholiday weekends, a trend emerged that could offer some explanation.Asdomestic markets slow down, in anticipation of coming holidays,opportunities present themselves.

I'll just cut right to it.Ithink China watches for these opportunities like a hawk.It's no secretChina wants more gold.They often downplay just how great their desireto accumulate is, but make no mistake, they are buying gold like thereis no tomorrow.Hence, the theory was espoused, just last Tuesday (see story here)to be exact, that China was waiting till our domestic markets took eyesoff gold trading, to pounce on as much "gold for sale" as they couldfind.

Then just as predicted, as markets re-opened Tuesday, goldprices rose from $1486 last Friday to a quick $1510 and then $1516 inthe aftermarket.Then, no sooner did gold make a not-so-stealth $29move higher than reports begin to circulate, predicting gold at $1800 between now and December.

Asbudget deadlines approach, rest assured, debt is on the rise and withit the potential for more printed money a weaker dollar and highermetals prices.(At least in my humble opinion.)And while Greece's onagain off again bailout seems to be on again, others wait in the wingsto make headlines of their own.Spain, Portugal, Ireland . . . next!

WhatI see, is that after Europe goes through a series of bailouts, viaprinted money, the U.S. will resume with some other new and humongous QEequivalent as the race to debase continues.I don't see gold pricesgoing anywhere but up and I don't see gold demand falling off - not byone ounce.In fact all evidence suggests, there just isn't going to beenough gold to go around.

So next time you think of selling lowbecause you're bored and you begin to believe all the rhetoric about thegold rally being over, know this.Nothing has changed except the levelof our debt.And, for every ounce you are willing to sell there issomeone waiting to buy two.

$1800 by December?This may be a little light.