Expect Gold To Gain More Than 30% This Year

Regarding the Fed's continued attempt to suppress the price of gold, John Embry recently had this to say, in particular, to their ability to drive down the price from $1220 in December to under $1100 by the end of the year, thereby making gold's 2009 returns less spectacular than they really were.

... All of the foregoing is just noise and standard behavior by the usual suspects who have been messing with the gold market throughout the price rise from $252/oz. to the hight of over $1220. By creating a false closing price in 2009, they have just helped to ensure a tenth consecutive higher year-end price in 2010, and quite frankli, I will be greatly disappointed if gold's price appreciation in the coming year doesn't exceed the best annual gain seen in the past decade (31.3% in 2007).

I think it is important to remember that bull markets continuously climb a wall of worry and then experience violent corrections which serve to clean out the nervous Nellies, the latecomers and the momentum investors. Gold has once again experienced just such a phenomenon and I expect it to be the precursor to yet another strong up leg early in the year.

I expect 2010 to be a banner year for gold and silver as the true depth of the world's financial malaise is more widely acknowledged. In this environment, I anticipate that gold, in particular, will garner increasing recognition as the only real money and the true safe haven as the slow motion trainwreck of the world's fiat currency system begins to accelerate.

John Embry is Chief Investment Strategist at Sprott Asset Management