Rising Oil - Rogers Forecasts $2,000 Gold

The yellow metal was slightly higher today. All eyes are on oil.

Oil prices went above $105 and could rally further on:

• Intensified fighting in Libya
• Investors worried about a protracted export suspension in Libya
• Political contagion in the Middle East, a region with more than 60% of the world’s proven oil reserves
• Morgan Stanley (MS) ceases oil trading with Libya. Exxon, Marathon Oil and Conoco have either cut off or greatly reduced dealings in order to comply with U.S. sanctions.

Jim Rogers reiterated his bullishness in the precious metals raised question regarding Saudi’s oil reserves.

“Gold will go to $2000 in this decade. It’s pretty simple as far as I’m concerned. Silver will certainly go over $50. The old high on silver was $50. Silver will go to new highs again. All these prices are going to go to absurd levels by the end of the decade, by the end of the bull market.”

"Saudi Arabia has been lying about their (oil) reserves for decades. The reason oil is going up is the world is running out of known reserves of oil.”

We had an article on Saudi Arabia last week and also mentioned in gold price forecast page. To follow up, the country is drafting up to 10,000 security personnel into its north-eastern Shia Muslim provinces, clogging the highways into Dammam and other cities with busloads of troops in fear of March 12 "day of rage" by what is now called the "Hunayn Revolution".

While Libya and the social unrest in the Middle East can raise prices of gold and oil much further, a US dollar comeback will put both PM’s and stocks under pressure.