This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Great Gold Binge Nears an End

NEW YORK ( TheStreet ) -- Gold prices catapulted to a new record Friday as fears of a global double-dip recession sent investors piling into the safe-haven metal.

Despite the flight to safety, experts warn that time may be up for this current rally.

Gold for December delivery skyrocketed $30.20 to close at $1,852.20 an ounce at the Comex division of the New York Mercantile Exchange, although settled well off session highs. The gold price has traded as high as $1,881.40 and as low as $1,824.50 while the spot gold price was adding $25, according to Kitco's gold index.

Silver prices closed up $1.74 at $42.43 an ounce. The U.S. dollar index was down 0.42% at $73.94 while the euro was up 0.44% vs. the dollar.

Gold prices have risen more than 6% in just a week as investors gobbled up the metal as protection against slowing global growth from China to Germany to the U.S. A day after Morgan Stanley (HPQ) lowered U.S. growth prospects for 2011 and 2012, gold prices showed no signs of slowing down.

Citigroup (C - Get Report) also joined the fray, lowering its 2011 U.S. growth forecast from 1.7% to 1.6% and for 2012 to 2.1% from 2.7%. JPMorgan (JPM) went event further, warning that the U.S. will grow just 1% in the fourth quarter from the previously expected 2.5% and just 0.5% in the first quarter of 2012. While growth signs point to the possibility of a double-dip recession, Bank of America (BAC) may slash 10,000 jobs, according to a report by The Wall Street Journal, which is ominous for any attempt at a recovery in employment.

Investors don't really have a lot of options for "safe" places to stash cash as Hewlett-Packard's (HPQ) dismal 2011 outlook kept stocks volatile giving limited respite from Thursday's carnage. The popular gold ETF, SPDR Gold Shares (GLD), added 15 tons Thursday to 1,286, but many experts are now bracing for a pullback after gold's explosive run.

David Banister, chief investment strategist at ActiveTradingPartners.com, said that gold will peak at either $1,862, $1,880 or $1,907 an ounce.

"One of those three is going to peak out this parabolic blow off top rally and be followed by a great opportunity to profit by shorting," he said.

Banister, who thinks that gold's long-term bull run is not yet over, said that peaks are typically followed by 15%-20% corrections, which would take gold to the $1,500 an ounce level.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AEM $24.57 0.00%
AUY $1.96 0.00%
C $53.28 0.00%
EGO $3.06 0.00%
GLD $108.70 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs