Whatcouldyouhaveboughton1January2008,andstillhaveyourwealthintactcome1January2009?

Gold,saysPeterGrandichofTheGrandichLetter。

Tradingaround$860anounce,thegoldpriceisrightwhereitwasthistimelastyear,whichisntsomethingthatcanbesaidformanyassets。

Anditlookslikeyoushouldclingtoyourgoldin2009too。

Demandfortheyellowmetalhitarecordhighinthethirdquarter,saystheWorldGoldCouncil,whilesupplydroppedby9。

7%。

Eventhoughtherecessionwillprobablyleadtoslackeningdemandforjewellery(IndianimportshavealreadydroppedforasecondmonthinDecember),therearetworeasonstoremainbullish。

Firstlytheresgoldstraditionalstatusasasafehaven。

Forexample,inAugustlastyear,asconcernsaboutthefinancialsystemmounted,salesofthegoldAmericanEaglecoinweresuspendedforaweekbecausetheUSMintcouldntsourceenoughblankgoldcoinsfromsupplierstosatisfydemand。

Secondly,thestimuluspackagesbeingmountedbytheFedandgovernmentsaroundtheworldhavethepotentialtobringbackinflationsoonerorlater,withtheresultthatpreciousmetalswillstrengthenagainstallpapercurrenciesandotherassets,saysMarcFaberoftheGloom,BoomandDoomreport。

Weaksupply,strongdemandandvalidfearsofinflationareaperfectmixofingredientsforagoldrally,addsMartinHutchinsononBreakingviews。

Howhighcoulditrise?

StandardCharteredBankforecastsgoldwillaverage$985anouncein2009,upfromanearlierforecastof$875。

Butitcouldhavemuchfurthertogo。