You cant compare $200 oil to $1500 gold, gold is still cheap, as I said before Im extremely bullish on gold due to future inflation and a collapsing dollar. Price predictions: 1200 by end of 2009 1500 mid 2010 2000+ by 2011 Gold is still cheap compared to where it traded in the early 80's, with the dollar becoming worthless on a second to second basis, gold will continue to push higher. Why is that I see more talking fools complaining about gold prices being at $1000, but $100+ oil is fine.
The inflation bulls fail to see that the CRB spot measured in gold ounces has been steadily descending over the last 10 years, in a waterwall like fashion. If Gold was predicting hyperinflation, then why are commodities not equally participating? In 1998 the CRB basket of commodities cost 1.0 ounces of gold. Now it costs 0.35 ounces. From 1973 to 1980 the ratio collapsed from over 2 ounces to 0.4 ounces. The price of Gold isn't predicting anything material other than buyer's willingness to bid up the price.
How much of yours is in the stock market? The gold situation is more than an inflation story, it is a currency one also as the fed will be doing all they can to keep it down. Clean break of 1000 does not bode well for them. It is a cold north wind going against debtor status and money printing to the moon.
New highs always breed analysts who predict significantly prolonged moves. As someone has already mentioned, think GS predicting $200 oil. These predictions are as useful as the DOW 14,000 predictions etc.
I'm 115% long, 90% short, 25% net long across all accounts. 2% GC gold futures, 0.5% gold stocks. Gold is a trading vehicle like dozens of others, nothing else. Gold isn't a guaranteed insurance against anything, specifically not against inflation. Neither is it perfectly negatively correlated to the US Dollar index. If someone seems to insulate themselves against a weak dollar I'd simply suggest shorting the Dollar outright. Heck it even pays (carry) interest. How many of the gold bulls have a firm exit strategy in place? When will they know how to pull the trigger and get out? Oh wait, I know. It's one of those "hold forever" things