I don’t put much sway in what “pundits” say because I know they have an agenda…Jim Cramer taught me that much. However a report out today by Citigroup analysts says gold prices will hit $2,000 an ounce due to the global financial crisis. I find this significant because they see this happening in 2009 and this supports Jim Rogers expectation for gold next year as well.

Unlike Rogers, these analysts credit the rise of the price of gold to the political reaction to the financial crisis which is likely to cause more problems than they solve. The basic assumption is the over-reaction to banking and financial meltdowns is either a hyper-inflation creating “bailout reaction” or a full blown depression should those measures not work as expected…either option improves the price of gold.

The Telegraph reports,

“They are throwing the kitchen sink at this,” said Tom Fitzpatrick, the bank’s chief technical strategist.

“The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

“Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don’t think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes,” he said.

“This will lead to political instability. We are already seeing countries on the periphery of Europe under severe stress. Some leaders are now at record levels of unpopularity. There is a risk of domestic unrest, starting with strikes because people are feeling disenfranchised.”

I am bullish on gold prices for the next year and I’m not leaning on analysts but my own eyes. You should do the same before you invest. However, we all need a dispassionate facilitator to keep our investment goals clear in face of troubled times.

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Good Luck and Happy Investing!