Posted on 12/09/2005 6:01:51 AM PST by DebtAndDelusion
The price of gold has continued to rise in Asian trading, climbing to its highest level since 1981. Gains came despite concerns that the market may be set for a correction and some analysts are now predicting that prices have even higher to go.
Precious metals have been given a boost as investors look to protect themselves against higher inflation and weakening currencies such as the Japanese yen.
Gold climbed as high as $522.70 an ounce, before falling back.
It was hovering around the $521 mark during afternoon trading in Asia.
'Dizzy high'
"There's some profit-taking now, but look at where we are," said Darren Heathcote of NM Rothschild.
"It's broken $520, the target we had yesterday... and it looks like $525 is the next target."
One broker in Tokyo said that: "Gold has been drawing very strong interest from Japanese investors, and I don't think this boom will subside in the near term."
There are a number of factors pushing the price of gold higher.
Gold is seen as a haven from inflation and weakening currencies, although historically, once inflation is taken into account, gold has not proven to be a good investment.
There is also speculation that Asian and European central banks may cut US dollar holdings in favour of gold.
There also is the year-end increase in demand for jewellery, analysts said.
The price of gold has climbed almost 19% this year and has nearly doubled during the past five.
"It's a dizzy high," said Rothschild's Mr Heathcote, but warned that "we are looking at a very overbought market".
"We're looking for a correction. It has to come at some point," he said.
One might think there was a big war or major crash coming. Oh well, wars and crashes happen all the time. And gold just keeps sitting there. It might not gain any interest or have fancy paper appreciation but it sure does store wealth in hard times.
Of course the smart money says, "it's different this time." Those are the four most dangerous words in the English language -- it's different this time. Gramps used to hear it all the time in the 20's.
Those darn Asians and Islamics. What are they trying to do -- ruin us all?
HG
But inflation is still low, and the depreciation of the yen should not impact the value of gold, as denominated in dollars. Personally, I think it's more the case of investors not being satisfied with the meager gains on the stock market, and being afraid to put more money into real estate. Gold is the only thing left, but I predict that gold will ultimately demonstrate that it's not a safe haven either.
Do you know the North Koreans were printing US currency?
I believe the FED has decided to stop releasing money supply figures which are presumed to be way over the top. Inflation is a direct result of to many dollars in the economy. Gold is a hedge against printing money (inflation) and I belive this is the cause for the run-up.
My father had a friend who put all his money into gold in the late 1970s. I think it cost him something like $800 per ounce.
Great store of value.
'Those darn Asians and Islamics. What are they trying to do -- ruin us all?'
Probably. The islamics esp would like nothing more than to ruin the U.S.
Gold is a GREAT investment. If I had invested all my money in Gold when I first graduated from High School over 25 years ago, by now I would have ----
Less money than I had when I graduated High School.
(Gold was over $800 an ounce back then).
BTW, My HOUSE has appreciated in value MORE than gold in the last 5 years. So I guess you could have bought gold, but you would have been better buying your neighbor's house.
Your father's friend might as well have painted a target on the crack of his butt. Look at a chart of that bull market: gold went from a leisurely $200 almost straight up to the $800s, in the course of one year. Anyone who jumped in at those levels was taking a considerable risk.
Father and Gramps used to have some terrible arguments about gold. Gramps was an old Bryan supporter and made the cross of gold argument all the time with Father. Father said he would keep his gold just the same.
Unfortunately Father bought stocks on margin in 1929. When the crash came we had to move out of the city house onto the farm. If he hadn't had his gold I think we would have starved during the 30's.
Of course that experience taught some lessons about the goodness of the land and gold's ability to keep folks solvent during the depression.
Darn Islamics and Asians buying all the gold, and the government hiding the M-3 money supply figures from the public so they can print all the money they want to. The working man in this country is getting it from every end.
Oh well. Still got the farm, still got the gold and still have most of my teeth.
HG
fuel and food are not entirely removed from the inflation numbers, they just aren't useful in the monthly numbers because they are too volitile.
In the past 30 years, fuel prices have risen by just about the same amount as the underlying inflation.
IN the past 30 years, food prices have risen by much less than the amount of inflation.
College costs have shot up. So has medical costs.
But Gold wouldn't have been a good way to invest your kids college fund.
Yeah... your friend's dad was a johnny-come-lately boob who should've bought in when it was < $40 in '70.
This recent non-stop gold launch began almost immediately after the M-3 announcement. There's a possibility that the new Dubai gold exchange, online as of last week or the week before, is having some impact. Whatever the case, it's starting to feel like someone somewhere knows of a critical impending change in world economics.
And note that the government hasn't even started "hiding" the M3 numbers. They won't be "HIDING" them at all, but they don't stop reporting them until march of next year.
They official position is that M3 won't be reported anymore because it is a useless piece of information.
I'm not sure how not knowing the extra value of large CDs and repurchase agreements allows the government to print more money (which is covered under the M0 number) or relaxing credit (covered under M1/M2)
Hmmmmmm... looks like I have a dyslexic keyboard this morning...
"friend's dad" should be "dad's friend"
Darn... I almost made it for a full year without a single typo...
Now I'm gonna have to wait unti 2006 to try it again.
As a matter of fact, I would argue that .22 bullets would be a better store of value in a general economic crash than gold. You can at least get some squirrels for supper with bullets.
If he would have bought in 1972 instead of 1979 he would be rich. What's your point, buy high - sell low?
1972 High 70.00 Low 44.00
1973 126.00 64.00
1974 195.00 117.00
1975 185.00 135.00
1976 142.00 102.00
1977 168.00 177.00
1978 243.65 165.70
1979 524.00 216.55
1980 850.00 474.00
1981 599.25 391.25
1982 488.50 296.75
1983 511.50 374.25
1984 406.85 303.25
1985 340.90 284.25
2000 325.50 264.10
2001 291.45 256.65
2002 342.75 277.75
2003 417.25 319.90
2004 454.20 375.00
2005 524.10 ???.??
I have both :^)
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