Gold Set to Surge to $3,000 by June

Posted by Brittany Stepniak - Wednesday, December 21st, 2011

Slight economic improvements have had positive echoes in the markets lately. It has created a “risk on” trade within the marketplace, where demand for Treasurys lingers and

the dollar weakens. This has supported commodities, gold especially.

Many traders view the recent selloff as being a bit of an overreaction, with the weakening euro being a primary factor contributing to that sellof.

The most recent slump in gold prices has likely occurred because the dollar is slowly repositioning itself as the safe-haven of choice “because of the need for liquidity.”

As the conditions in Europe continue to improve, there's a strong chance we'll experience anupside with gold.

Meanwhile, market sentiments along the way are predicted to be wobbly...rapidly shifting back and forth throughout the next few months...

Gold for February delivery dipped down to $1,616.80 per ounce on the Comex in New York this morning – dropping by 80 cents an ounce.

*Image courtesy of Kitco.

The good news is that gold is more more expensive to buy with currencies other than theU.S. dollar. In Asia, gold broke above its 200-day moving average, right around $1,620 per ounce.

In order to restore gold traders' confidence in an up-trend, gold needs to close above that level.

For the remainder of 2011, an unstable euro and the strenghtening dollar could “provide short-term headwinds for gold.”

But, fear not. The year is drawing to a close and the 2012 outlook remains optimistic for all you gold investors.

David Williams, director at Strategic Gold Corp., has an insider perspective on where gold will go in the coming year. According to his careful observation of the market trends and economic data,gold is likely to climb all the way to $3,000 or higher in less than six months' time.

"I personally think we are on the way up again. There could be one more wave down on technicals but then it [will move] up very quickly." Williams thinks that the main catalyst will be inflation, that all the paper money that has been pumped into banks and held in their coffers will finally make its way into the system.

"The moves that we are experiencing right now on the way up has to do with gold being viewed as a store of wealth," he says. "As people realize that's a better place to go with it then it will pop up."

 *Indented excerpts courtesy of Kitco.

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