Posted on 10/26/2009 12:58:06 PM PDT by h20skier66
or over more than 18 months we have watched the gold price churn below $1,000 and in the process forming three tops, before breaking out to above $1,050 in early October 2009. Why will it not fall back to well below $1,000 and possibly as far as $850 this time?
We say this because the moves occurred at a time when many facets of the gold market were absent from the gold market, such as investment demand, low jewelry demand and central bank demand. Traders held sway over the gold price and it is they that decided that the moves of the $: € decided the price of gold. This lacked a reasonable basis to it. Why should the gold price be tied to the €? Such a relationship implies that the $ in isolation, is the most important factor in the gold market. We counter that and say, yes COMEX is a U.S. market and such traders do have enormous pricing power, but when the full force of all sides of the gold market come into play, COMEX diminishes in importance, just as the waves of the sea are of less important than tides are, to where the sea will climb on the shoreline.
Yes, the state of the $ is important in pricing gold and it is the ‘hub' of the currency world, but to gaze at it alone is to ignore the much bigger world of gold in its entirety.
We now foresee a larger de-coupling from the $ by gold, as we move forward. Yes, the waves of the $ will ebb and flow and continue to cause traders to move the gold price against the $ as before...
(Excerpt) Read more at commoditynewscenter.com ...
Usually when I see that phrase, it means that it's a good time to find a different investment...
>> Why will it not fall back to well below $1,000 and possibly as far as $850 this time?
uh... because it’ll fall back to $200 like the rest of the commodities when the coming deflation takes hold?
>> Usually when I see that phrase, it means that it’s a good time to find a different investment...
Gold really IS different, though. It will only go UP from this point on — forever. It’s, like, money, you know.
That’s the reason there are so many gold dealers busting a nut to take your worthless dollars in trade for *their* gold. It’s because they care for you. It’s (sniff) really touching.
The Lipper Gold oriented Funds index is up 47.68% YTD.
What is the difference between priceless and worthless? A buyer.
The bottom line is that gold is a metal. Nobody needs gold to survive. And there is so little of it in the world that only a relatively few people can have any not just appreciable, but measurable amount.
If you take a gold coin to the supermarket and offer to pay for your groceries with it, they can likely only offer you its face value, if it has been made into a legal tender coin. If you say it is worth many times its face value, they would have to take your word for it, and they aren’t going to do that.
Nor are they going to give you change for what you say is its value.
It’s a pretty metal mind you. And it’s useful for electronics and industry. But its days as a currency are long gone.
People who have gold fever will always argue the point. But unless you have gold fever too, gold is just a metal.
That’s the reason there are so many gold dealers busting a nut to take your worthless dollars in trade for *their* gold.
Same for the “sell me your gold” retailers. They’re not accumulating, they’re selling it soon after they buy it.
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