I was scanning the news wires in search of a particular item late last week when a story caught my eye: It seems that Newmont Mining Corp. (NYSE: NEM), the world's No.2 gold producer, believes that the burgeoning demand from Asia's newly minted middle class will send the yellow metal up to $1,600 this year and even higher in 2011.
The Newmont story reminded me of another news item that I'd read just days before - a news-service poll of analysts that said that the current Wall Street consensus was for gold prices to reach $1,700 an ounce in 2015.
What a joke.
You see, just a few months back, when gold and silver prices seemed like they were jumping every day, Wall Street and the other Big Boys were blitzing us with messages explaining why we "had to" buy gold.
You heard it on the radio. You read it online. You saw it on the nightly news. We were even inundated with those late-night infomercials or "junk-mail" packets that detailed the benefits of those funky "collector coins" (including some that were "individually hand painted," no less!).
Gold was going to $2,500, $5,000 or even $10,000. And only fools weren't in gold - or so they claimed.
But when gold prices stopped running, so did Wall Street's aggressive forecasts. In fact, we've basically seen an about-face - as if the Big Boys are now low-balling their gold price forecasts.
Don't get suckered.
If you buy what Wall Street is selling right now, you'll lose in a big way - twice. You'll miss out on the major profits that will come when gold prices run up to their inevitable new highs. And - perhaps even worse - you'll get left behind and find your buying power eroded in a big way when the inevitable harsh inflationary pressures ultimately take hold.
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