Will QE Drive Gold to $1500 By Year End

More than one analyst has put gold at $1500 by year end.Since the beginning of the year, we at Lear Capital have been in that camp as well.As the year turned, gold prices hit new highs but then quickly retreated as market and economic direction became increasingly unclear.

Will there be a double dip, more quantitative easing or just a good old fashioned recovery?No one knew - at least no one would admit they knew.I think the reality is that everyone knew what was coming they just didn't know everyone else believed the same.

Then came an endless series of unemployment reports.Despite hearing claims that jobs were being created, the numbers began to speak for themselves.Then came questions about a double dip - a lengthy debate ensued.Then housing data disappointed, car sales slumped and finally everyone started to suspect everyone knew QE was making a comeback.

Then, gold began a steady ascent taking just enough of a respite to keepeveryone guessing a bit.Now the cat's out of the bag as the Fed has once again used the "QE" word.I think it has been used so much in the last 18 months that QE is indeed a new word on its own.Is there anyone who does not know what QE is?

In response, gold began to reveal its true strength.Even the talking heads are getting it.Globally, currencies are all taking a hit, each taking its turn to leap frog its way down.Japan's recent move to weaken its currency seemed to spark the realization that a weak currency is where it's at if you ever want to have a chance to pay back a dime of debt.

Now the $1500 question again.Can gold hit $1500 by year end?With gold rising some $130 an ounce since the beginning of August, I would put it right on track.But while short term goals seem to make good conversation, do not lose sight of the fact that gold is showing long term strength.

Think about it.If the goal of every central bank is to debase its own currency, where's the bottom and how do you know when you get there?Answer: There is no bottom.

All there is, is an endless supply of more currency.And, because all currencies are dropping in value together it won't matter.The measure will be the gold price as global inflation takes root and rises like Jack's bean stalk.

So, now that the cat's out of the bag, it may be time to climb the bean stalk and snatch a golden egg from the goose who laid it.Gold at $1500 by year end?Very possible.Longer term, however, the sky is the limit for gold.