Posted on 09/15/2009 12:09:15 PM PDT by RC one
NEW YORK (MarketWatch) -- Gold futures climbed back above the $1,000-an-ounce mark to finish at a new record on Tuesday, after upbeat U.S. economic reports and as Federal Reserve Chairman Ben Bernanke said the recession is likely over. The front-month September gold contract ended up $5.10, or 0.5%, at $1,005.0 an ounce on the Comex division of the New York Mercantile Exchange. This marks the highest settlement for a nearby gold contract. The more active December contract rose $5.20, or 0.5%, to finish at $1,006.30 an ounce. "Gold is continuing to knock on the $1,000-an-ounce door without making a concerted effort either way to test resistance or support," analysts at Goldcore said in a note.
(Excerpt) Read more at marketwatch.com ...
Isn’t a recession officially over after 2 consecutive quarters of GDP growth?
I thought Gold had been above $1011 before.....
Yes and Bernanke is the captain of the Titanic with icebergs looming on the horizon.
Bah! Who needs “officially”, they can claim we are in a recession when the GDP doesn’t show it and can claim it’s over when it isn’t. The only thing that matters about a recession is what letter is by the President’s name. D-good, R-bad. (and now racist).
My mistake. Gold appears to be at a record high indeed.
"We have passed the low point of the depression," says R. Proctor, President of the New England Council.
Three months later, the stock market had fallen 37%. Three years later... 89%.
Today: Federal Reserve Chairman Ben Bernanke said the recession is likely over.
Uh oh...
From March, 2009: "...gold is to be owned at all costs...."
It’s over when the television tells you its over now. That’s the new standard.
It was a couple of years ago actually. $950/oz has been kind of a plateau for a while. Now the question is(in my mind at least), is $1000/oz the new plateau or is it a temporary peak?
That's the question, indeed. I've been thinking about getting a chunk of my portfolio into gold, but I still think it's overpriced and needs a good correction before jumping in. To justify this price level as a long-term value, there should be underlying inflation as a cause. I'm just not seeing significant inflation yet. We all seem to *think* (myself included) that there will be inflation to come, and I suppose it is this speculation that is driving the price up. But at around $1K/oz it'll take a few years of high inflation to make that price worthwhile.
Nope... I'm not sure what to do either.
After that, I believe you will see a strong market realization that puts definite supports under the price of gold, and all movement will be upward.
It is at that time, if you still have financial instruments extant, you should liquidate them for whatever you can get.
As we travel through time entering into this economic miasma, we'll be treading very close to financial quicksand.
Be careful out there!
CA....
I think $950 is the plateau and I didn’t get into metals to make money, I got into metals to preserve money. I won’t sell it at $1,000/oz. I intend to hang onto it for years.
I have to agree with your analysis. What kind of market realizations are you anticipating?
is $1000/oz the new plateau or is it a temporary peak?
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Supply isn’t increasing much and it seems the Chinese are taking a breather from their buying..... and the price is consolidating at the high point,, sure it’s really only the dollar falling but the main gold buyers (Chinese) control the dollars worth for the most part. $1000 is a strong psychological point ,, probably shaking out a lot of sellers waiting for that number. It’ll be interesting to see what the next stop is.
Probably some time after the New Year, say around March or so, there will probably be a tumbling dominoes type effect in a number of areas, with most of them pointing to the massive hyperinflation that will be on the horizon.
These types of things really scare investors, even in the best of times, and we are most assuredly NOT in the best of times!
Consequently, Gresham’s Law will manifest, and good money will seek a safe haven.
Once that happens, the supports for the price of gold will become quite firm, quite rapidly, and the rest, as they say, will be history.
Compounding that problem will be the likelihood that the winds of war will become quite brisk and rather disturbing.
We’re in for awful times, it is true, but I also firmly believe these times must come to pass and be allowed to run their course.
That being said, Lord help us!
CA....
Bernacke is simply saying what he thinks he must to keep the stock market from tanking. He’s the Baghdad Bob of the financial industry.
That said, the chickens are coming home to roost. There is a reason gold is up. That reason is that the country is carrying way to much debt. This will eventually result in inflation as the government begins to enough paper so people can pay for things. Gold’s value is established independent of any particular economy. Hence, it’s value will be stable and/or rise in an inflationary environment.
If Onada’s present economic policies are not rescinded, it is inevitable that inflation will come. Along with that will come a time when Americans cannot afford even goods from China. When the Chinese economy begins to falter better watch out.
One other little tidbit. My son works in the power generation industry. The industry—not just his company—is experiencing a 20% decline in demand. They are expecting a further decline of at least 10% over the next one-two years. His company is doing an analysis as to the economic viability of moth balling plants or simply operating them at minimal levels.
That’s not a political analysis. That’s a business analysis. So what does the power industry know that Bernacke does not? Oh, but we were told yesterday by the alleged president’s erstwhile press secretary that The Messiah did not know anything about the DC Tea Party.
This doesn’t mean gold is worth more -— it means the dollar is worth less.
Onada, in the absense of any other info, will be in office for more than three more years. Unless he is forced by some unseen event to moderate or reverse his policies you’ll see the inflation in spades.
Many objective economic observors are predicting something big and bad will happed in October. Not sure what he trigger will be. Perhaps craming Onadacare down our throats, bank failures, continuing foreclosers, continuing unemployment growth, cap and trade etc. Could any one or a combination of things. There is really nothing holding the Stock Market up right now accept unsupported comments from Bernacke that the recession is over. Other than that there is no reason for The Market to be anywhere near 5000 let alone 9600.
I wish it were otherwise. I’ve been trying to sell my home for two years now. Gotta get out of NJ.
But reality is what it is. I’ve protected myself to the extent possible. Reduced stocks to FDIC insured amount and converted the rest to gold. I did this three weeks ago, but a lot of folks will be jumping on the train. Better to buy into something that might be a little high now, than lose your stock porfolio.
In a year, with the Bush/Onada so-called “Stimulus” initiative, things as we know them—from a financial point of view—have been significantly transformed. Can’t rely on pre-Stimulus logic to see you through.
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