By Kishori Krishnan Exclusive To Gold Investing News

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The United States is firing up the printing presses. This desperate move means the value of the dollar is destined to disintegrate. What this also means is that gold will decline on a muscular US dollar, profit-taking, technical selling and potentially deflationary economic data.

The yellow metal often moves inversely to the U.S. dollar because gold is seen as an alternative to the greenback. The dollar advanced against its major rivals Friday in New York as the rally in riskier currencies broke down ahead of key policy meetings next week.

“The rally in the dollar has hit gold price,” said Jim Steel, a senior vice president and metals analyst at HSBC.

Recent dollar-selling abated further overnight, after German officials warned that if the group of E.U. nations does not stick to its goal of keeping budget deficits under 3 per cent of GDP, the single currency would sustain some additional hits. Kitco’s analyst Jon Nadler said in a research note: “Gold prices followed lower, after eking out small gains on Thursday.”

The disintegration of the dollar may be somewhat alleviated against other pieces of paper, as the central banks of other countries potentially join the Bank of Japan, the Swiss central bank and the U.S. in quantitative easing. So, the dollar may not go down as hard as it ought to against other pieces of colored paper. But certainly it will against various other assets like precious metals.

MSN Money’s Jim Juback has a contrarian view. “Gold is looking better than ever in the long-term. The devaluation of the previously rock-solid Swiss franc means the world has one less safe haven in an inflationary crisis. Gold and only gold is going to hold its value in the world going forward.”

And where will that lead investors? Straight into the arms of gold. Interestingly, a new CEO survey, of emerging to mid-tier gold producers, has also highlighted that gold is set to hit new highs in 2009. Most have predicted that gold will be trading in the $1,100 to $1,500 range by year’s end.

CEO speak

A continued global economic tsunami and the increasingly urgent scramble for an investment lifeline will combine to power gold prices ominously higher and into uncharted territory later this year, said the CEO’s of a dozen emerging to mid-tier gold mining companies, who were recently interviewed by BNW Business Newswire.

There were the usual pessimists. David Hall, CEO of Aurizon Mines Ltd. (TSX: ARZ) maintained that gold’s normal cyclical “pullback” during summer months would probably be repeated this year. The likely continuation of a worldwide deflationary environment over the next several months would also contribute to keeping gold prices in check, Hall added.

What nearly all of the pragmatic business leaders did agree upon was that the nearly $800 billion U.S. economic stimulus package would spark the onset of hyper inflation as early as this fall. And that would swiftly and unequivocally establish the $1,000 mark as gold’s next key support level, they said.

Bob Gallagher, CEO of New Gold Inc. (TSX: NGD) said his newly beefed-up company is moving aggressively to capitalize on the investment world’s glowing appetite for physical gold. “Year-on-year gold production is decreasing globally. As gold mines age and get depleted, gold reserves are not being replaced. This situation is happening at a much greater rate than new ore bodies are being discovered and put into production”, he added.

A key reason why New Gold announced a $280 million merger with Western Goldfields Inc. earlier this month. Gallagher explains that the added cash flow from Western’s Mesquite gold mine will underwrite the cost of putting New Gold’s New Afton deposit in British Columbia into production. This should add a further 85,000 ounces of gold to New Gold’s expanding annual output. In the short term, the combined annual yield from the merger’s three existing mines is projected to be around 335,000 ounces in 2009.

Incidentally, gold and silver are the only hard assets that haven’t been seriously debased by a global deflationary vortex. Aurizon’s (TSX: ARZ) David Hall maintained that sophisticated investors are not only hoarding gold bullion; they are also increasingly betting big on emerging to mid-tier gold mining stocks. The attraction: gold producers “represent a flight to quality” in the form of “low balance sheet risk” and leveraged exposure to a rising tide market for the noble metal.

Another key lever for gold prices would be a likely end to the U.S. dollar’s strong rally of the past few months, according to Dale Ginn, CEO of San Gold Corporation (TSX-V: SGR). “I think the U.S. dollar will weaken in response to America’s huge debt load and as a result of the Chinese and other major investors diversifying into other assets other than the greenback. Assets like oil and gold, and maybe even the Euro. All of this should help to push gold prices higher,” he added.

Ginn maintained that are especially powerful dynamics converging to create a “very bullish” upside for gold in the coming months with the prospect of a $1,500 an ounce milestone being reached even before the year’s end.

Company News

High Desert Gold Corporation (TSX:HDG) released its audited financial statements for the year ended December 31, 2008. The company experienced a significant reduction in working capital following the completion of its substantial issuer bid. After adjusting for the share buy-back of 33,862,870 shares in January 2009, the company had working capital of approximately US$1.7 million.

The firm’s plan for 2009 is to focus on its gold properties and to joint venture its copper properties. A drill program is envisaged to extend the known mineralization at Canasta Dorada and a surface program will be completed at Artillery Peak.

Augen Gold Corp. (TSX-V: GLD) announced the change of its TSX Venture Exchange stock symbol from “AUJ” to “GLD” effective at the opening of the market on Monday, March 30, 2009. “The change to our trading symbol represents the positive changes that have occurred at Augen Gold over the past few months. We have a new board, new management in place, a stronger financial position and promising developments at our large Swayze Belt property,”said J. David Mason, chairman of Augen Gold.

Evolving Gold Corp. (TSX-V: EVG) has announced its Phase Two drill program at Rattlesnake Hills, Wyoming. Beginning in mid-May, Evolving will utilize three diamond core rigs to drill up to 15,000 meters (48,000 ft). Evolving also has eight other gold properties in New Mexico and Nevada including a lease agreement with Newmont Mining Corporation on four prospective gold properties (North Carlin District Properties) located within the prolific Carlin Gold Trend. Evolving Gold has approximately $17 million in its treasury.

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