Jim Sinclair Bets a Million Dollars Gold Price Will Hit $1650 before the 2nd Week in January 2011

One question that all gold investors want to know whether they be new gold investors or long term holders of gold bullion, is how high will the gold price go?

Jim Sinclair, noted gold expert, has really put his money where his mouth is on this topic. For years now Jim Sinclair has been calling for the gold price to reach at least $1650 during this gold bull market and has more recently commented that he thinks if anything his prediction is way too low.

Giving new meaning to the term commitment, Jim Sinclair has made a wager of $1,000,000 US dollars that the gold price will hit US$1650 before the 2nd week of January 2011.

Jim Sinclair was the original founder of the Sinclair Group of Companies in 1977, offering brokerage services with branches in New York , Kansas City, Toronto, Chicago, London and Geneva. That was sold in 1983. and Sinclair served as a Precious Metals Advisor to Hunt Oil and the Hunt family for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by the Chairman of the Federal Reserve, Paul Volker. He’s also been a General Partner and Member of the Executive Committee of two New York Stock Exchange firms and President of the Sinclair Global Clearing Corporation (commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies).

Sinclair is the author of numerous articles, three books dealing with a variety of investment subjects, including precious metals, trading strategies and geopolitical events. He is often called to speak at gold investment conferences and his commentary on gold and other financial issues garners extensive media coverage at home and abroad.

In January 2003, Mr. Sinclair’s "Jim Sinclairs MineSet," was launched and now hosts his gold commentary as a free service to the gold community.

On this website Sinclair makes the announcement.

"My position on timing and price is that Gold will trade at USD $1650 before the second week of January 2011."

"I am offering a $1,000,000USD wager to a financially qualified party that this will occur within the stated timeframe. Any party on Bloomberg, CNBC or CNN-Business stating an opposite opinion on the price of gold should be informed of this challenge."

"Please communicate to ANY vocal bearish so-called gold expert that I challenge them to put their money on their views."

"Any commentator unable to financially meet this challenge should not be opining. If they really knew the gold and currency market they could easily meet the challenge."

This means that if the gold price does NOT reach $1650 USD on or before the end of the 1st week of January 2011, then Sinclair will have to cough up the princely sum of One Million US dollars to anyone who takes up his bet.

Now … is that confidence or is that confidence?
He goes on to say:

"I am relying on you CIGAs to forward this challenge to any vocal bear, suggesting they stop flapping their lips by putting up or shutting up. It is one thing to hide behind a computer screen. It is another to bet
the ranch on the view you promote."

"The technical procedure of a serious wager is:

1. Prove you can in fact wage the challenge by an attorney's letter.
2. Segregate the funds in cash or near cash kind in the hands of your attorney.
3. Execute an agreed upon binding contract stating the terms of the wager."

As has been the case for the last 8 years while the gold price has been rising year after year, there is no shortage of financial commentators and so called experts providing their advice that the gold bull market is over, every time there is a correction in the gold price.

For example, this investment advice titled "Goldman Sachs says sell gold in 2008", reported by Reuters:

LONDON, Nov 29 (Reuters) - Investors should sell gold in 2008 to take advantage of falling prices as the dollar steadies, Goldman Sachs said on Thursday, naming the strategy as one of its top 10 tips for next year.

If these financial commentators are so sure of their forecasts they should be more than happy to take Jim Sinclair up on his generous offer to double their money in just 3 years time.

Perhaps someone may be courageous enough to take Sinclair up on his challenge, but the way the long term gold trend is going, his $1,000,000 would be better invested in gold bullion.

If Jim Sinclair is correct with his forecast that the gold price will reach $1650 by 2nd week of 2011, gold investors who buy gold today at $900 will be the ones who win, as they stand to make a profit in USD of at least 83% in the next 3 years.

A Gold Price Buying Opportunity

Over two days the gold price has dropped 10 percent. This is like the local department store offering a 10 percent discount on the gold price!

This is a fantastic opportunity to buy gold. A window of opportunity for a few days before the gold price starts it climb to even higher peaks.

The long term trend of gold is still upward and onward and the regular drop before a further climb to greater heights has been the track record over the past few months.

Remember, every time someone buys gold, someone else has to sell it. But with exchange traded Funds, this can now be done in a flash. But gold is not actually changing hands, instead the value of gold is being affected by the hugh amount of gold being bought and sold by traders trading ETFs.

In addition, the US Dollar Index is being shored up on the quicksand of false economy, by hurriedly printing more dollars to save more banks in deep trouble with mounting debt. Eventually this frail edifice is going to crumble and the dollar will continue its downward spiral.

Gold, however, keeps its value. Gold is money and in the coming months and years this will become even more apparent.

So now is the time to buy gold which the gold price is at a discount.

It may be the last one available.

Price of Gold Hits 1000 Dollars an Ounce!

A historic moment in the price of gold happened today when the price of gold hit that magical 1000 dollars an ounce. For gold bugs this was champagne time (paid for with gold of course) and a celebration of that which they have known for years. Gold is Money!

This does not say much for the dollar but it says an awful lot for the price of gold. This is a highest ever. Various factors have influenced the dramatic rise of gold, most notably the ever weakening paper dollar. In 6 months gold has more than doubled. In 5 years gold has more than tripled! This shows where the real faith and trust is. Not in the US dollar or, for that matter, any fiscal paper money, but in good solid shiny yellow gold!

Those that say buy gold and own gold are now running around saying, "I told you so!", "I told you so!" and they are right.

Gold IS money!

Predictions from gold experts are now that gold is likely to reach an incredible 2000 dollars an ounce this year!

How could this be? It is, as has been so ably pointed out, not the value of gold that is changing, but the value of the fiscal currency. As the price of gold rises, the true value of the dollar in your pocket comes to light. Those people that own gold will still be able to buy the same amount of service and products with their ounces of gold while people continue to scrabble around to find that even more dollars are required to buy the same product or service as an ounce of gold.

Gold is more than a hedge, more than a safe haven. It is a established bank of asset worth, for the astute investor, the person who saves and, indeed, even the person who uses gold as a currency, for gold is gold and paper is paper.

This gold price rise is not a fly by night increase. This is not the 1980s all over again. This is a steady stable rise that has been going on for ten years and the trend looks set to continue off into the distant future until the true value of the heavily inflated paper currency matches the value of pure gold.

That could be many thousands of dollar to an ounce of gold.

So watch this space for the true value of the gold price in the future and remember, Buy Gold!

Gold Price Poised for a Long Jump

The gold price is poised for a long jump. Steady in the 970 range with a few peaks above 990 recently, gold is looking good to make the big jump passed the magic 1000 dollars an ounce anytime soon.

With the US economy continuing to falter despite frantic attempts to prop it up, and with banks now teetering on the edge with more debt than one can throw a stick at, more and more investors will be seeking that safe haven for their assets thereby pushing gold up into the rarefied atmosphere of 1000 to 1500 dollars an ounce over the coming weeks and months.

Not lost on investors lately is the fact that gold and oil have long been compatriots in the market place and oil is now approaching an all time high at near 105 dollars a barrel, adjusted for inflation. Yet gold still remains at less than half of its inflation adjusted high of 2400 USD per ounce. So What gives?

Previously the price of gold rose at around twice that of oil, yet now we have a scenario where the gold price is rising at only half that of oil. The up down, up down, up down of the gold price seems to indicate a fight between those forces keen to keep the price of gold down and those forces trying to bring it back to normal. Well you cannot hold a good man down and you cannot continue to hold gold down under these circumstances in the face of such economic turmoil, so it is sure to want to follow alongside oil as it has always historically done in the past.

This means it has some catching up to do and a gold price of 2,300 dollars an ounce is not out of the question over the coming months.

So, exercise your golden legs folks, the long jump is coming!

Gold Price Verging on 1000 USD Per Ounce

Today the gold price is less than 2 percent below the 1000 dollars per ounce.

Who would have thought, 5 years ago that the gold price would climb so high. This is no 1980 flash in the pan. This is the real McCoy.

As we prepare to break out the champagne, eyes are now looking speculatively at the $2000 per ounce mark. Some even speculating higher. Crazy? Not really. How crazy would it have been to predict $1000 per ounce five years ago. Many gold experts, including the noted James Turk, predicted then that the price of gold would go over US$1000 per ounce. It was just a question of time.

Agreed the weaker dollar, rising inflation and other factors have all had their effect on the rise but gold was bound to rise as the consumer price index rises. Gold is always good for buying goods and services ounce for ounce. An ounce of gold will still buy the same products as it did in 1975. But you need a mountain of paper currency these days.

There may be a bit of profit taking when the magic $1000 is reached. But then it will be onward and upward once again.

As long as we have inflation and a weaker US economy and gold being seen more and more as a safe haven, the gold price will continue to climb.

It still has a long way to go. The 1975 to 2008 graph says it all. The trend is likely to continue well past the $2000 per ounce mark and a long way beyond.

Chip Hanlon, who holds gold as the manager of $1.5 billion at Delta Global Advisors Inc. in Huntington Beach, California advises, "It is hard to see how the monetary environment is going to be anything but supportive of higher gold and commodity prices anytime this year."

And Ron Goodis, a trader at Equidex Brokerage Group Inc. in Closter, New Jersey, who has been buying and selling gold since 1978. points out, "It's up 15 percent since breaking the 1980 record in January, and may rise another 33 percent to $1,300 an ounce by year end."

The gold price is not a roller coaster it seems, more like a rocket to the heavens!

How to Lose Double Your Money on Rising Gold Prices with Gold ETNs

Deutsche Bank announced that it will issue three Gold Exchange Traded Notes (Gold ETNs), that will be traded on the NYSE Arca.

The New Gold ETNs are:

DB Gold Double Long ETN (NYSE Arca: DGP)
DB Gold Double Short ETN (NYSE Arca: DZZ)
DB Gold Short ETN (NYSE Arca: DGZ)

The ETNs provide +200%, -200% and -100% monthly returns respectively on gold future prices. The Gold ETNs also provide an additional return equivalent to investing cash in Treasuries which adds approximately 5% return to each Gold ETN, including the Short ETN.

There are two ways to lose money in a Gold Bull Market.

One is to get in the way of a generational gold bull market by going short. Going short is where one bets the gold price will go down.

The other way to lose money is to buy gold on margin and have your entire position wiped out with a margin call. These new Gold ETNs provide you with the opportunity to be wiped out both ways.

They also offer an even better way to lose your wealth in a gold bull market by allowing you to go short gold on margin. That is for every 1% that the gold price increases, you will lose 2% of your capital. When you consider that the gold price has increased over 30% in the last 6 months from around $650 to today's gold price of $970, if you had of owned the DB GOLD Double Short ETN during this time you would have lost 60% of your capital in just 6 months. The bonus 5% T-Bill rate on top of this staggering loss would hardly make up for it.

While the GOLD ETNs also give you the opportunity to go long gold, take careful note that the Gold ETNs are not backed by gold bullion. So you are not investing in gold when you buy the Long Gold ETNs, you are investing in a paper product which is not actual gold. The Gold ETNs merely track the price of gold futures, and you have no rights to any actual gold. There is a big difference between owning a paper product that tracks the price of gold and owning real physical gold coins or gold bars in your possession or gold bullion in secure storage.

Richard Russell the editor and publisher of Dow Theory Letters makes this important point about what gold is and why people buy gold, on his website on the 19th of February:

"Gold is the universal, time-honored standard of wealth. Gold is pure, tangible wealth, and since pure wealth cannot be bankrupted or destroyed, gold is totally 'safe.' Gold is so safe that it doesn't need to pay any interest to tempt people to hold it. Wise men and women don't hold gold for income any more than they hold a ten-carat D color diamond or a Picasso picture for income. They hold these items because they represent timeless wealth."

How To Profit From Rising Gold Prices
The wise way to buy gold is to buy physical gold bullion without margin that you own 100%. In the form of gold coins or gold bars, or by buying gold online via a service such as goldmoney.com, which is a convenient, safe and cost effective way to buy 100% pure gold bullion online, stored in a secure vault.

IMF Gold Sale is a Spit in the Wind

The Bush administration is backing a plan for the IMF to sell off some of its gold.

The Bush administration recently announced it supports sales of as much as 12.9 million ounces, recommended by Andrew Crockett, former head of the Bank of International Settlements of IMF gold stocks

The IMF, which in view of the current surplus of funds most nations have, is becoming largely redundant and is having a hard time keeping its head above water these days.

It tried to get approval, first in 1999, and then again in 2005 to sell some gold to cover its losses, but was knocked back both times. US Congress demanded then that the IMF puts its house in order before it sells off the family jewels.

But these days the El President Bush rules the administration, so it is likely the IMF will get the go ahead in the next couple of months and sell off almost 13 million ounces in the hope that it will stave off a flagging economy, or at least the appearance of one.

If IMF do sell gold, it will be but a hiccup. This small amount of gold the IMF is contemplating selling could easily be gulped down by China without even a burp.

You know what they say. You will be assimilated. Resistance is futile. Nothing, not even selling off the IMF crown jewels, can save this paper economy.

Gold is money! Buy Gold!