Right now, some measures show the broad supply of money and credit growing at a rate of nearly 13%. That's the highest monetary growth since just after 9/11, and it matches the growth rate we saw in late 1980, when inflation hit 14%. So is there more inflation on the way? Most definitely. And in times of inflation the demand for gold will only increase

Ironically, these central bankers have continued printing money at the worst possible time:

• When global demand for goods and services is already at all time highs;
• When the world’s most essential natural resource, oil is already facing severe supply limits;
• When the U.S. dollar has already lost a great deal if its purchasing power;
• And when the world is already dealing with massive issues like terrorism

Always keep in mind: While central bankers and politicians can effectively create paper money at will, they cannot control the supply of gold in the world.

And there isn’t much of it to go around: ALL the gold ever mined in the history of the world (about 151,000 metric tonnes) can fit into a 62.3-foot cube. All the ingredients are in place. Record demand for gold continues. Meanwhile, available supplies are dwindling, as are new discoveries. On top of that, central bankers around the world continue to print money freely, depreciating their paper currencies in the process.

Add it all up, and you can see why the bullish trend for gold should now continue. Since 1800, the industry's boom and bust cycles have averaged about 10 years. However, the last downward trend lasted 14 years (from 1986-2000). So in our view we think we’re only about halfway through the current upward cycle.

Our target for gold is a minimum $730 for 2007 and we could easily achieve that within the next few months. That’s about a $70 move from current prices. And we would not be surprised to see a spike to $800 per ounce if geopolitical forces boil over. Any pullback in the price of gold provides an opportunity for the savvy investor.

Steve Pond is an economist and gold investor with more than 15 years trading experience. Visit his website at 1st-gold-information.com to get weekly gold information, gold prices and gold investment advice tips and strategies.