Posted on 03/13/2008 8:34:29 AM PDT by TigerLikesRooster
Gold at $1,000 on Weak Dollar, High Oil
Thursday March 13, 11:02 am ET
By Lauren Shepherd, AP Business Writer
Gold Futures Hit $1,000 Per Ounce Benchmark on Falling Dollar, Rising Oil Prices
NEW YORK (AP) -- Gold futures hit $1,000 an ounce for the first time Thursday, pushed past the benchmark by the sinking dollar and record crude oil prices. The dollar fell below 100 yen during Asian trading Thursday, its weakest level against the Japanese currency in 12 years. The dollar also dropped to all-time lows against the euro.
After reaching $1,001 on the New York Mercantile Exchange, gold for April delivery dropped slightly to $999.70 by midmorning Thursday.
The price still doesn't match the all-time high of $850 in 1980, if that price is adjusted for inflation. An $850 ounce of gold then would be worth $2,177 in today's dollars.
The $1,000 an ounce price, though, is still a milestone and a telling sign that investors are continuing to abandon the dollar.
Gold has been pushing up against the $1,000 an ounce mark for weeks, mainly because of the weaker dollar. Interest rate cuts -- and the prospect of more on the way -- have weakened the currency so much that foreign investors can buy dollar-based commodities like gold and oil more cheaply.
Crude oil futures hit a record high above $110 a barrel Thursday, after first crossing that level Wednesday, also due to investors abandoning the weak dollar.
Investors have been expecting gold futures to rise to $1,000 as they watched the dollar spiral lower, said Scott Meyers, senior trading analyst with Pioneer Futures, a division of MF Global. Gold has been steadily creeping closer to the record after rising nearly 32 percent in 2007.
The dollar's decline and the boost in the price of oil price merely added the extra push.
"We're getting a scenario where commodities are the place to be today," Meyers said. "With the weak dollar, it's hard to be against them."
Meyers declined to speculate on how high gold could go, saying, "to pick a top is a foolish game to play at this juncture."
The Federal Reserve's meeting next week could provide more encouragement for gold prices since the Fed is widely believed to be considering cutting interest rates again. Another rate cut could reduce the dollar's value further, making gold an even better investment.
The old yellow fellow rises again...
An ounce of gold buys 10 barrels of oil.
At the beginning of the decade, an ounce of gold bought 10 barrels of oil.
The price of oil and gold have not changed in price, the dollar has.
This is the beauty of inflating the currency. As the cost of a thing rises, people focus their anger on the people who provide that thing, rather than on the pols who are robbing the till.
I have the solution.... raise taxes, increase gov spending, create a bloated gov run health care system, keep Social Security the way it is, keep regulatory conditions such that no new nuclear power stations or refineries are built, keep ANWAR safe for the spotted owl... am i missing anything dems????
You forgot that we have to pay owl gore for his worthless paper carbon credits.
Can't have that now can we ?
That’s a great point on the value of silver coinage.
As opposed to our current crop of fake silver painted copper trash.
Literally hundreds if not thousands of paper-worshipping FReepers have mocked gold’s rise over the last several years. Where are they now? Hoping the rebate check will arrive soon?
There was a brothel in Denver, CO, that had their finest doves for $100 per night.
And a oz. of gold bought a first class/top of the line men's suit.
An oz of gold still fetches a fine men's suit today.
I wish they were made with copper Trash!
Pre 1982 pennies
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