Gold Tops $1,200 as Dollar Declines; Silver, Palladium Jump

[jeff of pa]

Dec. 1 (Bloomberg) -- Gold prices topped $1,200 an ounce for the first time as the slumping dollar spurred investor demand for an inflation hedge. Silver and palladium futures jumped to 16-month highs.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aB12Fl_1909c

 

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[texan connection]

Amazing.

 

[placerman]

Gold isnt taking a break is it?

It is already above 1216 as I type this.

At this rate it will be 1400 by the end of the year.

 

[jeff of pa]

Gold isnt taking a break is it?

It is already above 1216 as I type this.

At this rate it will be 1400 by the end of the year.

I Still say those who are Buying
are Crusin' For a Loosin'
For a Long Lonng Time.

Hold on to what you got for a Little
or Sell

 

[AU24K]

My take is that gold isn't really going up, instead the Dollar is going down. EVERYTHING is costing more, proof that it takes more dollars and that dollars are becoming worth less. Now the proportion and acceleration of dollars to buy gold viz a viz oil could be different; Here is where the speculators and commodity traders know the skinny.
But, it still takes dollars to buy these items...

Scott

 

[chirper97]

My take is that gold isn't really going up, instead the Dollar is going down. EVERYTHING is costing more, proof that it takes more dollars and that dollars are becoming worth less. Now the proportion and acceleration of dollars to buy gold viz a viz oil could be different; Here is where the speculators and commodity traders know the skinny.
But, it still takes dollars to buy these items...

Scott

Scott,

You are right on.

Gold is just sitting there, while our dollars shrink.

Hyper-inflation of the dollar is occurring.

 

[placerman]

I suggest you guys look at the Kitco Gold Index.

It measures the effects of the strength of the dollar versus predominant buying, in other words if gold rises because of the dollar falling it will be reflected in their index.

If the price of gold were SOLELY the result of the weakness in the dollar, gold would be about 1010 an ounce right now.

Everything above that level is due to predominant buying.

Here is the chart. Best viewed over a year or 5 year period to really see the difference.

http://www.kitco.com/kitco-gold-index.html#RT


I think over the long term it is pretty obvious that gold has followed the dollar or vise versa, but as the dollar is decoupled over the next 5 to 10 years, I think gold is going to go much higher.

A British economist recently predicted that gold would be at 6300 dollars an ounce, based on US money supply, if it wasn't being manipulated.