Canadian Bank Raises Gold Forecast to $1,700

Los Angeles – Gold bullion prices rose 0.9 percent for the week closing at $1,363.30 an ounce after reaching an all-time high of $1,424.60 on November 9.

Fundamentally, the gold price remains positive as gold gets ready to rise for a tenth consecutive year.

Silver finished down 1.5 percent for the week at $26.71 an ounce as the dollar hit a new two-month high on Friday. The Canadian Imperial Bank of Commerce (CIBC) has raised its gold and silver price targets for 2011 and 2012 due to additional quantitative easing programs being put in place. The gold price forecast rose to $1,600 and $1,700, respectively. The silver price forecast rose to $28 and $30, respectively. In its report the firm wrote that the “supply of money is beating out the supply of gold, driving prices higher.”

The gold-silver ratio is barely holding above 50. The ratio was at 68 as recently as August, meaning that just a few months ago you could buy 68 ounces of silver for an ounce of gold; today you can buy only 50 ounces. The change in the ratio shows the cost of silver getting more expensive relative to the cost of gold.

North Korea on Nov. 23 shelled a South Korean fishing community and military base on Yeonpyeong Island with highly inflammable ammunition that killed four people, including two civilian construction workers. It also blew out school windows and set dozens of homes ablaze.

Tensions on the Korean peninsula have been on the rise since March following the sinking of the South Korean warship Cheonan by North Korea, which claimed the lives of 46 South Korean sailors.

On May 20, an international panel which investigated the incident concluded that North Korea had fired the torpedo from a mini-submarine that sunk the 1,200 ton Cheonan.

South Korean President Lee Myung Bak has appointed a former top military commander, former Joint Chiefs of Staff Chairman Kim Kwan Jin, 61, to the office of Defense Minister as tensions rise.

Lee’s government said it would strengthen the South Korean military and “more actively” retaliate to North Korean provocations after the attack on Yeonpyeong Island. This was the first shelling of South Korean soil since the 1950-53 Korean War.

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American Bullion specializes in adding gold and silver to retirement accounts. If you have a question or would like to know more about your investment options, please call American Bullion at 1-800-326-9598 to speak with a precious metals specialist.