Gold Bugs Ready to Rock

Gold prices look set to rocket in 2007 with a sickly greenback and geopolitical tensions topping the list of driving factors, according to a broad cross-section of bullion market watchers polled by TheStreet.com.

The whole group, which includes miners, a portfolio manager and a coin dealer, sees the possibility of spot prices breaking through the 2006 high of around $725 an ounce, reached in May. Gold for immediate delivery sold for around $630 in late December, having risen from $520 in January.

What will be interesting to see is how well the group fares when compared with those surveyed for the annual London Bullion Market Association forecast, expected in mid-January.

Last year, most of those canvassed by the LBMA, a group dominated by bankers and consultants, woefully underestimated the extent of the rally, with an average forecast of $534.94. Instead, through Dec. 28, spot gold had a mean price of around $600 an ounce.

TheStreet.com asked a sample of experts how readers might best position their gold investments during the coming year based on their forecast. Each will be periodically revisited to see how the different scenarios are playing out.

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Well-known gold bug James Turk sees an average price of $725 next year with a low of $600 and a top of at least $1,000. "The key here is that not that gold is going up, it's that the dollar is going down," says Turk, who explains that the budget and trade deficits will weigh heavily on the greenback.

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