Gold Tops $1,400, a First

Wall Street Journal ^

[Sub-Driver]

Gold Tops $1,400, a First

By MATT WHITTAKER

Gold futures topped $1,400 for the first time amid uncertainty on the outcome of Group of 20 currency talks and worries about sovereign debt in Europe. [gold1108] Getty Images

Further highlighting gold's role as an alternative currency, the World Bank president advocated the inclusion of the metal in a revamped global monetary system.

The most actively traded contract, for December delivery, rose $5.50, or 0.4%, to settle at $1,403.20 a troy ounce on the Comex division of the New York Mercantile Exchange. The contract hit an intraday record of $1,409.40 in electronic trading after the close. The front-month November contract also rose, $5.50, or 0.4%, to $1,402.80.

[Hypo2]

“global monetary system”

But I thought the New World Order was a so-called conspiracy theory?

[WebFocus]

The breathtaking rise in Silver is the other real and overlooked news

It has ways to go before its historical price ratio to Gold catches up.

Banking giants, JP Morgan and HSBC are being sued for colluding to keep the Price of Silver down. Since the lawsuit was announced, Silver has started to surge faster.

[Arthur Wildfire! March]

Please note post 3.

[Just Lori]

I remember when gold went to $50.00. My Dad was so mad because it happened just before it was time to get my class ring, and it’s a heavy ring.

[Prince Caspian]

Where are the posts saying, “Yeah, but you can’t eat gold.”?

[HalleysFifth]

The price was actually far higher in 1980:

[SunkenCiv]

Thanks AWM.

• Silver Thursday: How Two Wealthy Traders Cornered The Market by Andrew Beattie -- The Squeeze: The Hunt brothers had already considerably reduced the amount of silver available on the market and made their continuing buying action all the more powerful by pushing up the price of silver. In any commodities deal, there are longs and shorts, but in this case, the shorts were vastly overmatched. A short squeeze formed as the brothers continued to buy up available silver stocks and take delivery on their futures contracts. The Hunts' position was now worth around $4.5 billion. People were pawning coins and silverware to take advantage of the high price of silver, but there was less than a third of the silver market left that the Hunts did not control via futures.

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• Could Hunt Brothers Silver Story Happen Again? by TradePlacer.com -- The group continued to accumulate silver and in 1979 the price jumped from $6/oz to an all time high of $48.7. At the time, it was estimated that the hunts controlled one third of the entire world's supply of silver... COMEX, the US exchange for silver changed some rules in the market about handling silver and contracts to prevent further buying. This resulted in a drop in the price of silver. Bunker looked around Europe for possible buying partners to help push up the price of silver. But the more the price dropped, the harder it became for them to borrow money. Ultimately, the Hunt brothers ran out of cash and decided to, in Bunker's own words to Herbert, "Shut it down." They ended up owing 1.5 billion dollars. Fearing financial disaster, Fed Chairman Volker approved a bailout plan for the Hunt brothers. A group of banks loaned them 1.1 billion dollars. Volker also raised interest rates dramatically to fight inflation that was careening out of control. Reagan's presidency somewhat cleared the fog, and gave a new optimism to the people and somewhat balanced the economy. The question still remains though as to whether silver could spike again, and if it does will the government have the power to stop inflation or the rise of silver.

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• Bunker Hunt's Attraction to Silver: A History of Cornering the Silver Market by J.D. Seagraves -- The conservative Hunts, who were members of the John Birch Society, believed another government confiscation was on the horizon, and since the feds had already taken gold, silver would be next. Thus, Bunker and Herbert chartered three 707 jets from Texas to Chicago and New York -- in the dead of night -- and loaded them with forty million ounces of silver to be whisked away to Switzerland for safe keeping. The remaining fifteen million ounces stayed in the U.S., but the Hunts would assume no greater risk... The Hunts met with the Shah of Iran and the King of Saudi Arabia, and although the Shah snubbed them and the King was eventually assassinated, the Hunts eventually began working with a Saudi sheik who was thought to represent his nation's royal family. By 1976, the brothers had accumulated another twenty million ounces of silver, and by '79, the price had risen to $8 an ounce... On January 17, 1980, it hit $50 an ounce. At that time, the Hunts held $4.5 billion in silver -- a $3.5 billion gain on their $1 billion investment. The various limitations and rules changes imposed by the commodities markets had no effect but to push the price of silver higher, until finally the COMEX announced that it was suspending the trading of silver and henceforth would only accept liquidation orders. Of even greater significance, Paul Volker had been installed as the Chairman of the Federal Reserve, and Volker was determined to get runaway inflation under control. The Chairman abruptly raised interest rates, thus soaking up the excess liquidity which had helped fuel the silver boom. The price of an ounce quickly dropped to $39, and by March 14, it was down to just $21.

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[Vermont Lt]

But you cannot eat gold!

(Feel better? I am a silver guy myself....)

[mrreaganaut]

The price was actually far higher in 1980

...using "Inflation-Adjusted Gold Prices" that is!

BWAAAHAAAAHAAAAAAAAAHAAAAAAAAHAAAAAAAAAA!!!!

(cough, chortle, wipes away tears, clears throat) Okay, I'm sorry, but that's just so wrong in so many ways. You really should use a sarcasm warning.

[Chode]

is it moving in euros too or just dollars???

[DeaconBenjamin]

Cool. How has the Dow done over the same period in inflation adjusted prices?

[DeaconBenjamin]

Most recent price:

[Chode]

i guess i phrased the question poorly, does the price wander around as the dollar goes through minor fluctuation relative to the euro while the price in euros stays relatively the same / more or less simply showing the dollar fluctuation???

[DeaconBenjamin]

[Chode]

thx...

[smokingfrog]

But you can’t eat silver.

[VADoc1980]

Nowhere near as good of a buy as it was at $300, obviously, but still has some move to go. I see $1650 by end of next year unless we really shape up.

[Kozak]

(Feel better? I am a silver guy myself....)

How does that taste?

[Kozak]