Gold Hits 17-Year High Amid Inflation Concerns

[buzzsaw_23]

Gold hits 17-year high amid inflation concerns
By Kevin Morrison
Published: September 16 2005 14:09 | Last updated: September 16 2005 16:51

Gold hit a 17-year high on Friday as concerns about inflation from high energy prices and worries about the US budget and trade deficits prompted investors to buy.

Bullion peaked at $458.80 a troy ounce, its highest level since December 1987, after breaking through last December’s long-term high of $456.75. The swift move through key technical and psychological levels of $450 and $455, and strong investor buying, increased the prospect of bullion scaling new long-term peaks.

The new highs mark the longest bull market run for bullion since it was free floated in 1968. The metal’s fortunes turned round in the summer of 2001 when it hit a 22-year low of almost $250 a troy ounce due to central bank selling. Its rise over the past four years has been largely the result of a near 40 per cent decline in the dollar against the euro.

Gold has not just risen recently against a weaker dollar, but also against other currencies. Bullion on Friday hit a long-term high of €374 a troy ounce and Y1,630 a gram. Gold normally has a negative correlation against the dollar and a positive correlation with the euro.

http://news.ft.com/cms/s/1b3889a0-2699-11da-b6fe-00000e2511c8.html

[RagAss]

1. Yeh...Gold and for some reason Latin America Funds are..

running wild.....

[CHIMO]

2. Ha Ha Ha Ha

From the same article.

“When gold broke through $450, it started to move up by itself and lost all correlation with other currencies,” said David Gornall, bullion and exchange director at Natexis Metals. Mr Gornall said recent gold buying was stimulated by inflation fears. US Federal Reserve officials have said in recent weeks that inflation has ticked up. Although US inflation for August met expectations of 0.5 per cent, economists expect a higher figure in September due to the rise in energy prices following Hurricane Katrina.

http://news.ft.com/cms/s/1b3889a0-2699-11da-b6fe-00000e2511c8.html

Well, guess that we just have to adjust the methods for calculating inflation. It's worked before.

Shh! Don't tell anyone about ratios, such as gold to oil and such. We just keep on doing what we did before. Who could have known?

[buzzsaw_23]

4. It's all fungible

to meet the needs of our masters. We serfs cannot understand the esoteric workings of the moneychangers. Hey we believe in something given value out of thin air-fiat currency. We'll believe anything won't we?

Back to the breadline.


From d.a. levy
"Really"
                     the police try to protect
                     the banks - and everything else
                     is secondary"

[CHIMO]

6. As Long

As one believes, then things can continue in the previous beliefs. Pretty self evident.

Then when it doesn't work out it's called the blame game. Probably would be hoarding by Asians or some other new currency that is required.

[davekriss]

9. buzzsaw!!! I've been using that quote for ...

...for twenty+ years! Glad to see another d.a. levy fan out there (you are the first at DU!):

For all the rest of ya' (sorry as this is a celebration):

SUBURBAN MONASTERY DEATH POEM
by d.a.levy

PART ZERO - Celebration With Rada Drums

only ten blocks away
buildings burned - perhaps burning now
the august night broken by sniper fire
police men bleeding in the streets
a sniper surrenders (perhaps out of ammunition)
Gun Jammed?
someone sed he was framed in a doorway
like a picture - his hands in the air
when they shot him -

only ten blocks away
from my quiet apartment
with its green ceramic buddhas
& science fiction books
unread skin magazines to be cut up
for collages

only ten blocks away
from my total helplessness
from my boredom enforced by the state
they are looting stores
trying to get televisions
so they can watch the riots
on the 11 pm news

the national guard jeeps patrol
the streets again
the army-green trucks with the
giant white star on the side
moving in the summer lightning

i cd tell you partly
why it happened
but you wouldnt believe me

like in Milwaukee
during a reading
just after i said
"this is a paranoid poem - written when i was
experimenting with paranoid states of consciousness,
but im not there anymore"
& a young girl sat writing
"shows paranoid symptoms"
probably for her psychology class
not hearing me at all

i cld try to tell you
about the hopeless despair
ingrained in ghetto walls
& police brutality or police stupidity
or police reality is more than just words
to define situation
by students looking for a cause.
the situations exist & continue
quietly in the dark while the
protest goes on in daylight -
both unheard.

Really
the police try to protect
the banks - and everything else
is secondary

during the riots
i watched the news
& didnt pick sides for a change

i just sat wondering about all
the living room revolutionaries
safe in the suburbs
who cheered everytime someone
was shot or a building went up
in smoke

ten blocks away
it was real
thousands of tourists
arrived

<snip>

form here: http://www.thing.net/~grist/l&d/dalevy/levy-l1.htm A perplexingly interesting read!

[buzzsaw_23]

16. d.a. levy

and Cleveland. They get in ya'.

Let's keep the spirit alive.

:toast:

[bucknaked]

3. Boy, should've listened to that sultry, English slut I always on CNN HLN.

Thought she was always just trying to get into my pants!

[Jersey Ginny]

5. I cashed out a mutual fund today

I'm putting the money in a money market fund. I've got a bad feeling about October. That is traditionally the month when the stock market, if it is going to plunge, will take that big hit. I never make these moves. I just keep my few assets steady. Just have a bad feeling.

[dcfirefighter]

7. I thought about buying gold

right after Katrina because I think inflation's on it's way. Couldn't find a way to do it through my broker, or an economic way of doing for the meager amount I have saved.

[bigluckyfeet]

8. Go Baby Go!

I may sell at $500.

[Danascot]

10. IMHO the best way to buy gold is

in the one ounce coins minted by many nations: the American Gold Eagle, Canadian Maple Leaf, South African Kugerrand. The price today for the Gold Eagle was $484.77. These coins are very liquid, and you could carry a fair amount of value with you if you suddenly had to bolt for the border. Kitco, at www.kitco.com is a great source for up to the minute prices as well as a reputable seller and buyer. You should also be able to buy coins at a local coin dealer, though be sure the mark-up is not out of line.

Apart from coins, you can buy gold through the commodities market, as well as trade in gold futures. There are stocks for individul companies that mine and produce gold, and mutual funds oriented to gold and other precious metals.

Gold prices rise with oil, wars, disaster and fiscal uncertainty, so it's no surprise it's going up.

My real worry is that China and the other Asian buyers of US debt will suddenly lose confidence in the US' ability to pay it's debts and require the US to make good on it's obligations which it cannot do. With Bush larding on the debt through tax cuts, Iraq and now Katrina, debt is going up fast, while tax cuts cut into the government's ability to repay. Even if China doesn't "foreclose", just a faltering of confidence could cause interest rates to jump. All this would cause the value of the dollar to drop relative to gold.

Frankly I'm surprised something along those lines hasn't happened yet. It's like Wiley E. Coyote walking out into thin air and not falling yet.

My opinion is that the stage is set for a good run for gold.

[CHIMO]

11. Just

A note on gold stocks vs bullion.

In the initial movement of the price of gold, gold stocks appreciate much faster than bullion. The profit potential of a company making one cent when the price goes up a dollar means that the company ends up having aa hundred cent profit.

Once the price movement has taken place the increase moves to bullion.

However, in the end the security offered by gold is that it is readily accepted. If things break down it is one means of trading.

Just imagine that one were in N.O. and a cop came by. You told the officer that my friend over there has a gold coin, which he will trade for two bottles of water. What do you think would be the outcome?

[slackmaster]

15. The outcome would be...

The guy with the gun walks away with the water, the gold, and the gun.

:D

[CHIMO]

17. Except

That the friend over there had some means of protecting himself. I didn't say that he was beside the fellow.

If you want the coin give me the water. Leave your gun(s) here and take the bullets and walk over there and you can have the coin.

Otherwise the deal is off! Take it or leave it buddy. And if you decline and change your mind the next time we deal I want ten bottles of water.

[slackmaster]

22. I'll never be in a dilemma like that

I have plenty of everything in my emergency supplies.

[slackmaster]

14. The problem is that things always get better and prices go back down

Down to a little over what it costs to get the stuff out of the ground, refine it, and make those coins and bullion bars.

[teryang]

18. Things always get better

Inequities in the distribution of wealth and income in this country have been getting worse for over thirty years. The inequities in the distribution of tax obligations, income and property are beyond what they were just before the great depression.

See Wealth and Democracy by Kevin Phillips.

[slackmaster]

23. Better or worse is always a matter of perspective

Inequities in the distribution of wealth and income in this country have been getting worse for over thirty years.

And people on the wealthy side have little reason to think about that.

[belab13]

21. The only trend I see here is that FED keeps printing more money.

Money supply has increased by a third in just the last 4-5 years. All this talk about fighting off inflation by raising interest rates while they're printing money hand over fist is the ultimate sham, which the rest of the world is starting to see through. See the latest TICS report. Them fureigners ain't buying our treasuries like they used to.

Gold is the ultimate inflation hedge. Got gold.

[JNelson6563]

24. Yes indeed

that's why I've been long on gold for some time now.

Portable wealth is the way to go IMO.

Julie

[arikara]

19. Buy coins

and bury them in your backyard

I just made a small purchase from here, dont' have possession yet but if it works out I'll buy more from them and get out of mutual funds.

http://www.goldline.com/

[goforit]

12. Poppy bush is saturated in profits of Gold.

[slackmaster]

13. It's a trap - the pushers are pushing it really hard lately

I've seen way too many full-page newspaper ads and heard way too many spots on AM radio trying to persuade people into speculating in gold.

Some people have made a lot of money by timing their transactions right. A lot of people buy it in panic as an inflation hedge and almost always come out behind.

[buzzsaw_23]

20. "The Pushers"

sums it up

:toast:

[leesa]

25. "...inflation concerns" Hello politicians and reporters! Go buy groceries

and household items. Stick your noses out of your ivory towers.