How high per oz. will Gold go before it tops out during this current long-term Bull Run?... $600?, $750?, $850?, $1,000?, $1,500?, $2,000?, $2,500?, $5,000?, $10,000?... of course nobody can predict the future with 100% accuracy...

However, using the previous peak price of $850.00 per ounce, which was reached in January of 1980... a case could be argued that adjusted for inflation (using an annual inflation rate of 6%) a current peak price in Gold could come close to $3,800.00 per ounce... (keep in mind that there will be pull backs in price along the way) here's the math showing 25 years of 6% inflation on $850.00...

And while some people argue that there's basically little inflation today as compared to 1980 (and they usually point to the current low inflation rate as published in the CPI... or the cheap imports coming from China that somewhat offsets inflation)... I can tell you with absolute certainty, that the current rate of inflation is much higher than what is currently being reported in the CPI....

I'm 100% confident in saying the true rate of inflation is much higher than what the current CPI reports due to my own unique work experiences... you see, in addition to being a part-time web developer, I also work part-time in the commercial real estate sector, and it's because of my work in the real estate business that I've been able to see first hand just how bad inflation really is. You see, in my real estate job, I work with Developers assisting them in the analysis and assembly of land for development projects... in 2000/2001, the construction costs to build a commercial concrete tilt-up building (slab on grade) was approx. $55 per sq.ft. ... in 2003/2004, the same building cost approx. $85 per sq.ft. to build ... and just approx. a month ago, one of my clients put out bids to construct another commercial building (one nearly identical to a building they recently built for $87 per sq.ft.) and the lowest of 3 bids came in at $125 per sq.ft. .... now, in constructing a building, there are hundreds of components used in the process, and what I've seen is; it's not just one or 2 items that have increased in price dramatically to significantly increase the cost of construction, no, almost everything has increased in price dramatically; from the materials, to labour, to hauling charges, to inspections fees, architectural & engineering fees, etc, etc. ... so when I hear the Govt. CPI stats say inflation is negligible, I know with 100% certainty it is a manipulated number... and I believe the reason why inflation rates are manipulated down these days is because the Politicians & Bureaucrats have learned that if the Voters knew just how bad inflation really was, the Voters would vote them out of their cushy jobs/pensions at the next election... so kind of like the way the Iraq war intelligence was manipulated for political purposes, so is the true rate of inflation today.... and oh ya, if all I did was work as a Web Designer (and wasn't exposed directly to the building industry) I'd basically be oblivious to the real rate of inflation, and all I'd really know is the cost of energy, gas, and real estate was getting really expensive. And if you don't believe me about my inflation analysis, go talk to a true/principal real estate Developer and ask him what his building costs per sq.ft. were in 2000, then in 2003, and again in 2005. Also, If you haven't taken the time to do the research and educate yourself about what the real rate of inflation is today, I strongly suggest listening to this interview by an expert on inflation & the CPI calculations, it's an excellent primer.

Back to Gold.... my personal estimation on whether Gold reaches or surpasses the $3,800.00 calculation above during this current long-term Bull Run is highly dependent upon the outcome of the 2008 US Presidential election... because there's one thing that I've learned watching the US economy, and that is; The direction of US Economic & Foreign policy is highly influenced by the political party ruling the Whitehouse... and I've further learned the US economy is so powerful, that it vastly affects the rest of the global economy... much more so than any other single economy/entity...

So... one of my personal observations/thesis's is; The Republicans are very old-economy oriented, and highly levered to the energy and war economies... while the Democrats are much more new economy oriented and much more supportive of new/disruptive technologies... so, if in 2008, the Democrats gain control of the Whitehouse, I believe the Gold price will reach it's peak at around the same time, I base this upon my speculation that the Democrats will quickly move to enact a more accommodative foreign policy, and will also quickly move towards a more progressive approach to new (alternative) energy technologies, the net result of which will ultimately lead to lower Gold prices.... however, if the Republicans maintain control of the Whitehouse, my speculation is the continuation of a somewhat aggressive foreign policy (hey!, let's reshape the Middle East!!!), and a continued path on the oil/carbon based economy, with mainly just lip-service paid towards alternative energy sources/development (for political purposes), the result of which will ultimately maintain high Gold prices, or lead to even higher Gold prices.

Also... if you carefully study the economic policies/consequences of the current Republican Administration... you'll be hard pressed to not see how the price of Gold wont be headed higher... from record debts and deficits, to accommodative policies on outsourcing US jobs, to the elimination of M3 reports in March of 2006 (in addition to the many other recent Republican policies/initiatives)... the current Republican Whitehouse could hardly paint a stronger case for higher Gold prices... even if they tried...

Virtually every single fundamental economic indicator I look at (expect for the massaged CPI rate and a couple other massaged stats) point to higher Gold prices... I personally have never seen another period in time where so many FUNDAMENTAL indicators are all pointing toward an increasingly bullish case for higher Gold prices...

Just ask yourself... "why is the Federal Reserve going to stop reporting M3 in March of 2006"?.... my best guess is; they are going to turn the PRINTING PRESSES on OVERDRIVE next year in-order to pay for the costs of Iraq and the rebuilding bill that'll come due for Katrina and Rita..... look, the cost of rebuilding from just Katrina alone is so huge, nobody can even come up with an accurate consensus figure on the rebuilding costs yet!!!!.... and what about the costs of fighting and rebuilding Iraq?, nobody can even accurately estimate the Iraq costs either, it's still to uncertain, and whatever the final number, it'll be very, very big... and what about the oil revenues that were supposed to self-finance the entire Iraq adventure?... did you know the US Govt. took the on-going cost of the Iraq war off-balance sheet earlier this year, basically in what looks to be an effort so the true state of US finances wouldn't look so bad?.... YIKES!!!!.

Another new trend recently emerging that is putting upward pressure on the price of Gold is; the change of some Central Banks from being "net sellers" of Gold to becoming "net buyers" of Gold.... recently the Central Banks of Russia, Argentina, and South Africa have indicated they will be increasing their net Gold reserves... and it is also rumored that the Japanese Central Bank may soon be joining these other 3 Central Banks as net Gold buyers.

There is also the huge US dollar surplus holdings that China has amassed as a result of their huge trade imbalance/surplus with the US... this huge Dollar surplus could be partially diversified out of Dollars and into Gold at anytime... and then there's also the pressure on China to revalue their currency relative to the US Dollar, which would also put pressure on Gold prices to go higher.

Another bullish case for Gold is the large US Dollar reserves held by OPEC countries... who are flush with US Dollars from record Oil prices.... these Middle Eastern countries have traditionally always favored storing a large percentage of their wealth in Gold... and this continues to be evidenced by the current trends of net increasing Gold purchases by Saudi Arabia, Kuwait, and Dubai.

Even the outsourcing of US jobs to overseas markets is very bullish for Gold... and in a way you've probably never thought of before, so let me explain quickly/simply how US jobs outsourcing is helping propel the price of Gold higher:
One of the major consequences of outsourcing of US jobs overseas is a net transfer of wealth from North American workers to Southeast Asian workers. When those jobs resided in North America, those US worker wages went into alot of things like; fancy cars, cool motorcycles, luxury boats, and many other non-essential consumer items (currently US consumers effectively have no savings)..... however, as those jobs go overseas to the South Asians, the Indians & Chinese are known/proven high net savers of their earnings, they rarely blow their money on fancy Muscle Cars, Custom Choppers, Luxury boats, and other non-essential consumer items... and because of the long history of corrupt banks in India & China, many Southeast Asians simply do not trust their local banks to hold their money/wealth (they've also had problems with currency fluctuations as well), so what ends up happening with their new found wealth is; they invest/store/preserve their earnings in Gold... and on top of this new trend is the long cultural history the Southeast Asians have for Gold investment that goes back centuries... so if you study the consumption trends in Gold in India, you'll find Indian consumption of Gold has recently started increasing at a rate of approx. 33% per year, which is very significant because India was already the largest consumer of Gold on the planet even before they started landing hundreds-of-thousands of US outsourced jobs... and this increasing Gold consumption trend from India is unlikely to decrease anytime soon, that is, unless you think the Republicans are going to put a stop to outsourcing US jobs by their best corporate donors/lobbyists anytime soon... LOL!.  The Gold consumption trend coming out of India is so significant, that given India's current consumption rate approaching 850 tons of Gold per year, and with a consumption increase trend of approx. 33% per year, within a period of just 5 - 6 years from now, India alone could consume the entire annual global supply of newly mined Gold.... now that's a serious trend.

There are many more cases/factors indicating continued upward pressure on the price of Gold, so many in fact, I could write for many more hours... but because of time restraints, I'll have to wind it down here.... I'll end on just one more case for Gold prices going higher, and that is; the new supply of yearly mined Gold is decreasing... this is due to a number of factors, a couple of which are; increasingly stringent environmental demands, and new technologies that have been able to strip more Gold out of the land in a shorter time period as compared to past decades... we are now in a period where the demand for Gold is currently outstripping it's new yearly mined supply.

I'd also really like to do a section on the trend of increasing Pension defaults by corporations, but I just don't have the extra time.

In summary... the price of Gold will not continue to go straight up like it has done lately, there will be pull-backs along the way, however, I believe we will see a peak Gold price (or close to it) in approx. late 2008 if the Democrats win the Whitehouse, at which time the price may only have reached the $1,000.00 - $1,500.00 per oz. level... however, if the Republicans win the Whitehouse again in 2008 (with a strong Neo-Conservative base) I believe Gold will continue to move much higher, ultimately reaching a peak of somewhere between $3,000 - $5,000 per oz by 2012.