Since New Years, gold prices have increased more than $100 per ounce, trading to $915 in early February. Tom Hartmann, broker analyst for Altavest Worldwide Trading Inc., says there has been a tightening of the trading range because of the implied inflation in President Obama’s proposed stimulus package. “People are looking for a place to park money,” he says, adding that people fear that more intervention will debase the dollar and that moves towards protectionism could induce China and Japan to stop buying U.S. debt. “People are buying gold for a variety of reasons, and no one is eager to sell.” In March, he says gold could test $990. He pegs support at $850.
“We have a hot market right now,” offers Fain Shaffer, trader and president of Infinity Trading Corporation. Gold always is valued in times of uncertainty, which is increasing globally. “There are some pretty disturbing numbers that are coming out,” he says. He notes that in the United States, there is a two-year supply of housing, unemployment rose to 7.6%, and we have not found the bottom for the Dow Jones Industrial Average. Japan’s industrial production is the worst ever and Toyota had its first loss in 70 years. He expects a pullback to $850 in late February, then a rally past $1033, the all-time high, in March.