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.
Dear hubbubhubbub,
Well, the price of gold has increase over 100% in the last five years, and folks are talking about it continuing to run up, right in this thread. I see a post or two aiming for $750 or $1000 or more per ounce.
Just the sort of stuff folks were saying when gold topped $800 25 years ago.
The decision can only be judged foolish in hindsight, when the market has reversed.
In fact, in 1979 - 1980, the economy was going to hell in a handbasket, inflation really was going wild, the Russians really were on the march, Islamofascism was just really getting settled into state power, oil really was spiking again, we really did have gas lines again, interest rates really were at record highs.
Why shouldn't gold have gone even higher?
Right now, we're seeing a little blip in inflation. It may get worse, it may not. But the economy is humming along with modest unemployment, modest economic growth, modest interest rates, nothing quite like the Cold War threatening us, why should we expect that after a doubling of gold prices in the last five years, they'll continue to soar?
Yet, folks here are telling folks to buy gold!
Myself, I think it's possible that gold could run up a bit more, but I suspect that in five more years, the price of gold will be nearer to $250 than it will be to $1000 per ounce.
If you'd have bought Intel in 1971 at what is now, after all the splits, 2 cents per share, you might have told me that buying Intel in 1995 at what is now, after all the splits, was something like $3 per share, was foolish.
But the stock continued to go up for a number of years, I sold off most of what I originally bought at very large profits (I sold most near the top of the market), and I still have a few shares lying around that are, essentially, "free."
But I bought when all the analysts were saying "sell" and if it had tanked, I'd have looked very foolish indeed.
Only if you have a crystal ball in working order can you forecast whether an investment will make one look like a genius or like a fool at some distant time in the future.
sitetest
So when the economy grows by 4% we'll find 4% more gold?
Far out in the uncharted backwaters of the unfashionable end of the western spiral arm of the Galaxy lies a small unregarded yellow sun.
Orbiting this at a distance of roughly ninety-two million miles is an utterly insignificant little blue green planet whose ape- descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea.
This planet has - or rather had - a problem, which was this: most of the people on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small green pieces of paper, which is odd because on the whole it wasn't the small green pieces of paper that were unhappy.
And so the problem remained; lots of the people were mean, and most of them were miserable, even the ones with digital watches.
for the record, by 10:00 est the price exceede 530 on the NY market
It must have been the blingbling keyword that threw you!
So when some politically motivated bureaucrat uses flawed econometrics to inaccurately measure a nebulous phenomenon he will only increase the money supply (which they now refuse to report) by that amount?
$624
If he was dumb enough to keep it in a safe deposit box...
Better mention that to the market participants who are short about 15K tons...
Or he could have bought, in 1970, the property on which my neighborhood was built, at about $10,000 per acre. If he'd have kept it undeveloped until now, it would be worth north of $200,000 per acre, now. By the way, if he'd have bought just about any old developable raw land in the Washington, DC region in 1970, today, it'd easily be worth 15 - 20 times what it was in 1970. That's even better!Property tax rise would have forced him to sell some or all of that land long before it reached 200K an acre...
No one is perfect. So how much did the money supply fluctuate under the gold standard? More or less than it has in the last 20 years?
Who's short?
some say $1000 you say $250. we shall see. interesting times nonetheless don't you agree? Let us compare:
In 1980 Volcker constrained money growth to wrestle inflation out of the economy and drive investors away from gold and back into paper assets. It worked (of course the 18% interest rate on gov't paper was quite a teaser), but Volcker was a one of a kind, a public servant with principle and a backbone. And of course times were different then, the U.S was a net creditor nation.
Fast forward to 2005. Now the U.S. is the largest debtor nation in the history mankind with no hope of ever repaying its obligations in current dollars. Ben (drop $ from helicopters)Bernanke is Bush's gift to gold investors. It's absolutely amazing that Gold has gone up almost every single day since he was confirmed. How high can it go? Who knows. $550 will be a 50% retracement from it's low ($850-$250). What happens when it gets to $550 will be interesting. It should pause and pull back (buying opportunity?). If it doesn't the next train stop is who knows where.
Your scenario of gold markets reversing in 1980 is quite a bit innaccurate. In 1980 it was government policy reversals brought about by Volcker that caused the markets to change course. Going into 2006, I don't see any government policy reversals forthcoming, especially with Bernanke at the Fed.
Bullion banks. J.P., Goldman Sucks and Deutsche Bank. They are the agents of the Central Banks that manipulate the gold price lower.
The cronies of Clinton Treasury Secretary Robert Rubin (at G.S.) made a fortune by "borrowing" gold from the U.S. Gov't and selling into the market to hold the gold price down while Greeniespan was running the printing presses at full speed. Clinton's strong dollar policy was actually a weak gold policy.
You left out the Bilderbergers and the Jooooooooooos.
The amount of gold has nothing to do with economic growth. You still have a mental block about that.
Any links that tell how much gold these entities are short?
Jeeesh! Then what's the solution? Go out and purchase some gold at $522 per? Gold is Gold is Gold and will only be worth something when it all falls apart. Only, in order to keep that gold (if you bought some) would have to be with gunsteel and some lead.....
No I didn't. Rubin is a Jew's Jew.
If you were in charge of the Federal Reserve and the economy was expected to grow 4% next year, how much would you want the money supply to grow?
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