$5,000 Gold Hits Radar

For more than 10 years now, gold has littered its path to record highs with milestones.I recall attending a college football game where, for a brief time I shared a table with the CFO of the college whose team was on the field.We talked and discussed how the college was investing its endowment funds, and as is my wont, I interjected a comment suggesting he add gold to his portfolio.He replied, "how much higher can it go?It's already, what . . . $476 an ounce?

I just smiled.There wasn't much I could say and after all, he was the CFO of a large college endowment fund and was certainly more educated than I in the world of finance.

Then gold broke through the $500 an ounce level and started gathering some headlines and then $600.That's about the time people paid attention to gold but in a negative way."Where can it go from here?"That was the echo I heard every time the Gold price hit the next $100 higher price milestone.

Last night, the Gold price edged toward $1900 an ounce.This on the heels of a raise in margin requirements by CME Group and the passing of two more milestones in the last 11 days that the media were convinced marked the end of the Gold run.All of this coming in summer, which historically is the slowest time of year for precious metals.I was reminded this morning that gold over the last 11 years, has risen 11% in the period August through December.If history holds, that puts us at $2,000 Gold by year-end.

Then, yesterday, I read "Gold at $5,000 Within 2 Months!"Frankly, I don't see that.Considering the number of business days during a two month period to be in the range of 43 or 44 days, that would require gold to move more than $70 per day higher each day.What I do see is the move toward $2,000 an ounce by year-end.Multiple analysts have made this call and that is the camp within which we have resided for the last 18 months or so.

Should $5,000 gold be on the radar now?Absolutely!There seems to be no depths to which the currencies of the world can't sink.Hence, higher gold prices.As Ron Paul says, "it's not how high Gold can go but how low the dollar can go."Add in the fact that there is still less than 2% of investment assets of the world invested into gold and you see how much potential there is for gold to rise.A shift of just 2 more percentage points of assets into gold or precious metals could skyrocket the gold price in a very short period of time.

Here's the sign to watch for.When the shoeshine boy is flipping a gold coin, as he offers his services to the many air travelers that walk by, that may be the sign that the gold price is near a top.Until then . . . don't trip on any milestones as you try to catch up with a market that seems to have grown longer legs than it had just a few months ago.