Posted on 11/11/2009 2:56:39 PM PST by blam
Gold Continues To Gain Against All Currencies
Commodities / Gold & Silver 2009
Nov 11, 2009 - 07:39 AM
By: Adrian_Ash
THE PRICE OF GOLD rose to fresh record highs against the US Dollar for the fifth session in six in early London dealing on Wednesday, recording an AM Gold Fix above $1114 an ounce.
Up by more than 28% for 2009 to date for US investors, gold also rose against all other currencies, breaking its best level against the Japanese Yen since July 2008 above ¥3220 per gram as world stock markets gained, government bonds held steady, and crude oil ticked higher from $79 per barrel.
Gold also broke new 8-month highs above €743 and CHF 1121 an ounce for Eurozone and Swiss investors, trading 6% and 4.5% respectively off February's all-time record peaks.
"Buying of gold and silver emerged around noon," says one Hong Kong dealer, confirming what both Japanese dealers Mitsui and MKS Finance – a division of the Swiss refining group – again called "a quiet day" for physical dealing.
"That enabled the metals to defy a weak Euro. When the buying was done, the metals resumed their Euro-following mode."
"Gold found the impetus to rally when China's trade balance data was released," says another analyst.
Beijing today reported a better-than-expected 13.8% drop in China's exports for Oct. from the same month last year. Imports, in contrast, were only 6.4% down.
"We're very, very encouraged to see what's happening here...to try to produce an economy more dependent on domestic sources of growth," said US Treasury secretary Tim Geithner of Japanese and Chinese consumer markets this morning in Tokyo.
[snip]
ping
If gold rises against every currency, does that mean our dollar retains its value against other currencies?
Not necessarily, an individual currency could rise or fall even faster than its fellows.
Gold rose against all currencies today, but has failed to make new highs against the pound, yen or yuan. I expect a mild dollar rally soon, and look for gold and stocks to go somewhat lower as that happens.
Nominally.
The biggest problem as I see it is that oil has had a somewhat traditional ration to gold.
Usually, in the neighborhood of ten to fifteen barrels of oil per ounce of gold.
If gold was to rise spectacularly against the dollar (or any other currency of high oil consuming countries), the Arabs are likely to adjust the price of oil to reflect the price of gold.
So if gold went to, say $3000 an ounce, well, you do the math!
And silver is just behaving like the bad step-child here...
Gold’s previous runup in the late 70’s took it to about 900/ounce, and silver went to about 46.
Gold at 1100 should take silver to around 55.
Gold is the anti-printing press.
The busier the printing presses, the better the price of gold.
Simple, really.
Well, “they” better get to making more gold, cause I hear it is running out.
When I was younger, and didn’t mind slopping around in freezing cold water, I panned gold for a hobby, and sometimes did pretty good. It’s getting about time to take up my old hobby.
The Bank Of England just began another round of 'Quantative Easing' (printing money).
“...the Arabs are likely to adjust the price of oil to reflect the price of gold.”
Well, if that happens, I’ll simply adjust my salary to cover the higher price of oil.
While the Arabs would love to control the price of oil, they also have to deal with market forces....and arbitrarily raising the price of their oil will dry up demand for their oil and for oil in general (i.e., people will use less, they will use more natural gas, etc.).
As to whether the price of oil will go up in proportion to gold...I agree, but not because of the Arabs, but rather because EVERYONE is printing money while no one is ‘printing’ oil.
Gold will continue to relentlessly punish all offenders and pretenders, and assume it’s role as the only true currency.
Beautiful, isn’t it?
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