Gold hits record at $1,045, gains on report of dollar's demise

Market Watch ^ | October 6, 2009 | Nick Godt

[AAABEST]

Silver and copper contracts also move higher

By Nick Godt, MarketWatch

NEW YORK (MarketWatch) -- Gold futures hit a new high on Tuesday, lifted by weakness in the dollar after Australia hiked interest rates and after a report that Gulf-area oil producers, along with China, Russia, Japan and France, are planning to eventually end dollar-based oil pricing.

With the greenback under selling pressure, investors moved into dollar-denominated commodities such as gold.

Gold for December delivery rose as high as $1,045.00 an ounce in electronic trade, topping the previous record of $1,033.90 in March 2008. It recently gained $23.50, or 2.3%, to $1,041.30 an ounce.

Gold's new high is "very significant," says Brien Lundin, editor of the Gold Newsletter, published by Jefferson Financial. "Reaching $1,100 by the end of the year is now a conservative estimate."

The dollar index /quotes/comstock/11j!i:dxy0 (DXY 76.29, -0.35, -0.46%) , a measure of the greenback against a trade-weighted basket of currencies, fell to 76.249 from 76.668 in late trading Monday. See Currencies.

The report carried in the Independent newspaper was denied by top finance officials, giving the dollar a small, but temporary, lift earlier. See full story.

"There's no telling the veracity of these reports, but the general trend has been going in this direction anyway: a weaker dollar and rising gold," Lundin said.

[crescen7]

nothing good can come of this

[DonaldC]

The really bad part about this, is that we no longer need leadership to strive for a balanced budget, but this gov needs surpluses, large ones, for a long time. Unfortunately, an entitlement society will never allow that to happen.

[Palin Republic]

Nothing but good can come of this. It's time to end the Federal Reserve, the source of Washington's corrupting, unlimited money supply.

We're past due for some creative destruction. Let the MF burn!

Rep. Ron Paul (R - TX)

The End of Dollar Hegemony

[GodGunsGuts]

I have physical gold and gold shares that I bought sometime back at a very good price that are benefiting quite nicely from our government’s profligate ways.

[AAABEST]

ping

[traderrob6]

Unless you own a mess of gold and silver.

[SiVisPacemParaBellum]

Invest in brass too.

[Free_at_last_-2001]

Unless you own a mess of gold and silver. - How very true - which is what you do when the kiddies are running the economy!

[crescen7]

“Unless you own a mess of gold and silver.”

Yeah, but eventually you have to sell it to buy anything.

Good news ! My gold is worth millions !

Bad news. Millions doesn’t buy much any more.

The longer point was, that this group of thugocratic opportunists are no better at creating a credible currency than the current Dear Leader who is destroying the only stable world wide unit of exchange that has ever existed.

Imagine a currency issued by the UN, being demanded as a unit of exchange by OPEC. International trade is likely to grind to a virtual halt. The possibility for true economic calamity will become high. That would be the real kind of calamity where people starve - not the kind we’re used to where we extend unemployment and buy a smaller plasma screen.

[equalitybeforethelaw]

First Copenhagen and the IOC voice their lack of confidence in Obamerica, now the rest of the world. Shoosh, why don’t they love us?

[ponygirl]

pingaling

[Atlas Sneezed]

Good news ! My gold is worth millions !

Bad news. Millions doesn’t buy much any more.

---

The point isn’t to “make money”, it’s to preserve the value of your wealth, while greenbacks are inflated out of meaningful existence.

[Publius]

[STD]

Roger that Amigo

[madison10]

One problem with gold. I could be starving and would not be able to unload it to eat...sort of worthless that way.

[crescen7]

“The point isn’t to “make money”, it’s to preserve the value of your wealth, while greenbacks are inflated out of meaningful existence.”

Yes I understand that.

But it only works if there is some recognized unit of value to efficiently convert the “value of your wealth” into some level of purchasing power. It could be dollars, or euros, marks, franks, yen, etc. Currently all major currencies, to some extent - define themselves in terms of the U.S. dollar. Without that stabilizing influence, it becomes increasingly difficult to conduct international, or long term business agreements.

The recent jump in commodity value is based (according to the article) on the speculation that OPEC, China, Russia, Japan, and a few others are going to create a NEW currency - sort of an “international currency”. I believe this will simply lead to the further splintering of confidence in the dollar and euro and push the world toward a system that approaches primitive barter. Such a condition could cripple the world wide production of goods and services.

And yes, should the collapse of major currencies continue, it would be better to hold gold certificates than dollar notes, yet it wouldn’t insulate the gold holder from the resulting collapse of wealth and productivity throughout the system. In other words, it’s of little value to be wealthy - if there is nothing being produced for your wealth to buy.

[OldPossum]

When I placed one of my small monthly orders for silver bullion two months ago the price was $14 (and some pennies...don’t have my records readily available); now I see that the price likely will be $17.30, or thereabouts.

Folks are going to be surprised if times go bad and precious metals are again valuable.

[Cuttnhorse]

nothing good can come of this

Unless you work in the gold mining industry...like me.

[Rome2000]

So this muslim communist son of a bitch and his fellow travelers in Congress have just assassinated the US Dollar and its like its not even a blip on the radar on the propagandists bamboozle of the American sheeple.