Gold which closed 2007 with its highest monthly closing price ever keeps going strong today. This is not just an anti dollar move as the charts from Fullermoney show. Fullermoney points out a good article by Prieur Du Plessis on the gold move and the potential for a lot more to come:
It is, of course, true that in inflation-adjusted terms the gold price is still a long way off its euphoric days of 1980. If adjusted for movements in the US consumer price index, the $850 record would today be around $2 250 and the average for January 1980 around $1 790.
The significance of gold moving in terms of all currencies is that this move is not just an anti dollar move. Gold is responding to a credit crisis and questions about whether the central banks have an answer to the crisis. also to fear that the only answer the banks hace is to inject very large sums of money into the world economy leading to inflation later. Donald Coxe wrote recently that he is watching the TED spread, gold, and the dollar index for signs the crisis is abating. No positive signals showing up yet.
No comments:
Post a Comment