For Gold, Everything's Coming Up Roses

[Johnno]

An interesting day's gold trading. The market went up 3.1 % in 24 hours. First rising by $8 in Hong Kong then flattening out, then a $10 rise on the New York markets.

I live in Australia and saw the $AUD strengthen against the $US so the Australian price remained relatively flat which occurs regularly with the skittish greenback.

I recommend the podcast by a "director at a major Eurozone bank" named "John" (no it's not me!) which is informative and surpisingly funny in a few places, considering the dry nature of the subject.

http://www.signs-of-the-times.org/signs/dl.php?link=pentagonstrike,co,uk%sott%podcast%sott_podcast_18,m3u

And keep in mind whilst paper currencies have come and gone in man's (recorded) time here, gold has ALWAYS remained the standard medium of exchange which has survived.

Johnno


http://www.thestreet.com/_googlen/markets/commodities/10279500.html?cm_ven=GOOGLEN&cm_cat=FREE&cm_ite=NA

Gold bugs' only problem on Monday was trying to determine which of a myriad of bullish factors best explain yet another move to fresh 25-year highs. The usual suspects -- inflation, geopolitical tensions, and a weak dollar -- were all present after a three-day weekend.

Most visibly, crude oil topped $70 a barrel amid heightened concerns about Iran's nuclear ambitions. Crude finished the session on a gain of $1.08 at $70.40 a barrel.

Gold for June delivery surged $18.70, or 3.1%, to $618.80 an ounce, off an earlier 25-year high at $619.30. Other metals followed gold's lead, with silver rising 51 cents to $13.36 an ounce, off a 22-year high of $13.38. Copper finished up 7.95 cents at $2.895 an ounce, after hitting yet another all-time high at $2.935.

Ali Larijani, Iran's National Security Council Secretary, said Western requests that Iran stop its nuclear-enrichment program are "illogical," according to Iranian news agency ISNA.

The standoff between Iran, the world's fourth-largest producer of crude oil, and Western countries has sparked concern over supply disruption. Crude oil prices are at levels unseen since last September when Hurricane Katrina disturbed Gulf Coast production.

Gold's surge so far this year has been fueled both by rising geopolitical tensions, as the precious metal serves as a safe haven, and by the inflationary pressures from surging energy prices, as gold also acts as a hedge against inflation.

Other metals have mostly followed gold's lead, but with their own twists. Silver has been surging even more amid expectations that a soon-to-be-launched exchange-traded fund (ETF) will boost demand for the metal. The fund, much like the streetTRACKS Gold (GLD:NYSE - commentary - research - Cramer's Take) ETF, should make investing in the commodity easier for retail investors.

Copper, meanwhile, has reached new highs amid continued signs of global economic growth.

 

[John Chang]

Still, though, you hear the implied derision for holding gold from the press and the public. Stupid batty gold bugs. Those wierdos. When it becomes acceptable, fashionable to own gold, then you'll know we're getting towards the end of this bull.

Expect more volatility as we slide off the rails into the bushes. There will be more $80 corrections in the price. It's not for the faint of heart. If this is the '80s for gold, I'd say we're going to see a 1987 at some point. Then the '90s for gold will begin. Who knows when and where it will happen though.

I'm not sure owning gold will be that much protection from the hilarity that's ensuing, but I guess it's better than not owning it at all.

If things get bad enough, gold won't have that much value. Things like clean water and unspoiled food may fetch more than any gold coin will.

And here's my final subversive thought for the day - if all you're working for is money, and money is becoming meaningless (which is one of the things a rising price of gold is implying), why are you working?

 

[on_strike_usaexpat]

I side with most commodity cycle analysts who say that we are only in year 5 or 6 of a 15-20 year boom in commodities and other real assets.

If one is fortunate enough to be in the precious metals, the intent should be to store value, preserve purchasing power to secure the necessities of life before a crisis and to help rebuild during the recovery phase if a collapse occurs.

After reading the articles on DU (Depleted Uranium) and pondering the impact of fallout from the use of tactical nuclear weapons in future conflicts in the Northern Hemisphere, I am glad my life has led me to the Southern Hemisphere (different air currents and circulation) in the midst of agro/commodity/natural resource country powerhouses with comparatively lower overall population densities than most areas to the North who should fare much better in a world military and economic crisis.