Gold extends gains to 2-month high as panic grips

Lewa Pardomuan
Reuters
Friday, October 10, 2008

Spot gold rose to an over two-month high on Friday while U.S. futures jumped nearly 4
percent, adding to the previous day’s late rally as investors scrambled for safety after heavy losses in equity markets.

The month-old financial crisis doled out more punishment, with Japan’s Nikkei .N225 tumbling almost 10 percent, its biggest one-day loss since the 1987 stock market crash, on
fears that a global recession was now unavoidable.

The U.S. government is weighing guaranteeing billions of dollars in bank debt and temporarily insuring all U.S. bank deposits to unfreeze bank lending and staunch massive losses in equity markets, The Wall Street Journal said.

(Article continues below)

Spot gold rose $1.25 or 0.14 percent to $912.75 an ounce from New York’s notional 2115 GMT close, its fifth day of gains, at one point hitting $925.05, its highest since July 31.
It is now just 11 percent off its all-time peak of $1,030.80 in March.

Physical selling capped gains and gold could trade in a volatile $850 to $950 range in the next few days, but bullion could also regain $1,000 due to uncertainties in the financial
markets, said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

“We heard there’s some selling from Thailand. Investors buy at the lows and sell at the highs, and of course the dollar is strengthening. We can say it’s very choppy,” said Leung.

The gold futures contract for December delivery GCZ8 on the COMEX division of the New York Mercantile Exchange, which missed out much of Thursday’s late rally as the U.S. Dow
collapsed by 7.3 percent in an avalanche of selling at the close, rallied to a high of $931.3 an ounce before easing back to $917.2 an ounce.

Full article here

Prison Planet.tv Members Can Watch Fall Of The Republic Right Now Online - Don't Miss Out! Get Your Subscription Today!

CANCER CONSPIRACY? Are "they" suppressing the cure? Will YOU be the next victim? Learn the Secret Truth! - READ FULL STORY

Comment Terms Of Use

14 Responses to “Gold extends gains to 2-month high as panic grips”

jfs.infowarrior Says:
October 10th, 2008 at 6:01 am
I fully expect gold to hit $6,000 an ounce eventually….too bad I don’t have any money to buy it with. Do you guys think I should use my line of credit to buy some?
Mikael Says:
October 10th, 2008 at 6:15 am
Why not.. Can be ones in a lifetime you know..

Mike
Omega Says:
October 10th, 2008 at 9:05 am
Dear jfs.infowarrior:

Remember that you shouldn’t necessarily consider gold as an investment but rather a store of value – if gold shoots to $6000/oz., that means that you are probably paying $30 for a loaf of bread and inflation is rampant. However in these corrupt times where the central banks managed to suppress the natural price of gold, it can be used for investment, but cautiously. If you are thinking of physical gold as an investment then your rate of return will obviously depend on how much interest you will pay on your line of credit and also on how quickly you intend to pay the debt. Most analyst agree that gold is under-priced and therefore can present an opportunity for investment. Although anything is possible in this volatile market, it is unlikely that gold will go to such heights as $6000/ounce, at least any time soon. You can probably bet on gold rallying this winter, maybe reaching somewhere in the range of $1100-1300 by the spring. The problem of course is always the central banks’ manipulation of the gold market. So calculate your interest and commissions and projected gold return and you may find that its not worth the effort. Better that you stay free of debt, pay down a mortgage or car loan, etc. If you are really brave you can use your credit line to buy call and put options on gold futures. But be prepared to spend your day in front of your computer screen watching the roller-coaster ride.

Just a few thoughts,
Cheers.
mythicshadow Says:
October 10th, 2008 at 9:26 am
http://ca.youtube.com/watch?v=3rrWRNJ2lOs
The Observer Says:
October 10th, 2008 at 9:26 am
jfs – use your credit cards to but storeable food. That’s what you’ll be buying with the gold anyway.
C.M. Says:
October 10th, 2008 at 11:31 pm
Gold plunged today. The GLD ETF was down $6.50 in one fricken day! Give me a break about pushing gold!
Troy Billington Says:
October 10th, 2008 at 11:38 pm
Gold is the thing to buy and keep in times like these, which is what makes me soo MAD over these ‘cash for gold’ ads on tv and the web. They know gold is going to keep rising and when everything else crashes, gold is going to be one of the long standing currencies with which you can continue to buy things you need.

As for using lines of credit to buy gold…YES! do that!! because your lines of credit will soon become worthless and the gold you have bought will be very valuable, if not for it’s value as a precious metal, but as a stand-in for the fiat currencies which are right now in deep trouble of disappearing (for yet another form of fiat currency).

Visit http://www.cashforgoldscams.com to learn more about the important reasons to NOT sell your gold for cash in times like these. As for buying long term storage of food, water and other needs you will find links on the site which will help with that as well. My goal is to spread the word of this and save as many people as possible from the bad things to come.
Swede1 Says:
October 11th, 2008 at 9:35 am
Stock up on all the gold you want, you cannot eat gold when your hungry. If the market crashes, good luck getting the banks to honor your gold. go nad buy food and seeds to plant food, that will keep your engine running folks.
911 we shall never forget Says:
October 11th, 2008 at 1:58 pm
The problem is that the average American still does not understand the full ramifications of what our so-called “elected” officials have planned and are doing to usher in the New World Order. This latest stock market collapse is obviously allowed to happen just like 911 was ALLOWED to happen, just another typical false flag operation of problem, reaction, solution to move the sheeple along. What true humanitarians need to do is to continue EDUCATING others as has been happening more and more with each passing day…its not enough that we recognize some of the signs occuring around us, our numbers need to reach critical mass, and we are close to that, and then maintain focus and pressure where needed. Our government asked us not to forget 911 whereby all these changes that have happened since 911 has transpired very quickly; therefore, let us do that, never forget 911 and hold those who were responsible for 911 accountable! Oh, and as a footnote, the Federal Reserve is a private banking cartel that is not federal and has questionable reserves at best that prints money based on nothing much like monopoly money and then charges interest on that created out of thin air fiat money to the USA–the IRS was created to assist collecting on “some” of the assests owed to the crooked Federal Reserve. We need to educate others about this as well! PEACE!
Invictus Says:
October 11th, 2008 at 2:20 pm
Just to even out the ledger, heres a story that talks about the Dollar being more of a safe haven than Gold, and remember, its what people “believe” in that will work, and people still believe in paper.
This article was printed on Kitco, by a person who loves gold. So theres no anti-gold bias in it, just an analysist trying to understand why gold and silver have not performed at all, and infact have gone backwards in their traditional time of strength.
http://www.kitco.com/ind/Pieterse/oct032008.html

Now lets see if this article gets onto the headlines news section of PP or IW’s shall we?
hedi Says:
October 11th, 2008 at 3:45 pm
Hey!!! What is happening???, the Dow, S&P, Nasdaq are on a historic down, yet gold was -8% down on friday, 8% negative in a single day!!!, wher do we go now??? any ideas???
Tod G. Says:
October 11th, 2008 at 8:33 pm
Why does gold follow the market you ask? Because the market follows the dollar, and gold follows the dollar. Print lots of dollars, and they both go up. Collapse the money supply like they’ve done since March, a massive drop not seen in decades, and gold and stocks go down. Simple. Also, when has it ever been good to buy gold when everyone wants some? What happens when the situation improves, as it always has, and the hysteria component of the price vanishes? The time to by gold is when no one wants it. This is the sensible method of Warren Buffet, were you buying silver when it was $3 and change like he was? Ask yourself what will you do if the Fed collapses the money supply multiple times like they did to create the last Depression? What will happen to the price of gold then? Find some thing that hasn’t been on a parabolic upswing to buy, IMO.

BTW look at this chart, gold may hold its value, but occasionally it goes over that value, like in 1980 and now:

http://inflationdata.com/infla.....lation.gif

The median price in 2007 dollars would appear to be about $400-$500 dollars an ounce.
Johnnyb Says:
October 11th, 2008 at 10:42 pm
Listen up guys…

Money is created out of debt. All fiat money is debt. When the banks go bust, they are no longer able to create debt, since debt is money the money supply is reduced. When you decrease the supply of something, you decrease the demand for it, this is why gold and silver are down because people need dollars more than they need gold and silver, thereforth you can not demand as many dollars for your gold and silver, as you could a few days ago, because the dollar supply has decreased while the supply of gold and silver has either increased or remained stable. Supply=Demand

So long as you do not sell your gold or silver you have not realized any profit or loss on it, same thing with stocks. Right now the wisest thing that you could do with your money is pay off your debts, and if you have any money left over buy municiple bonds. Cheers!
Omega Says:
October 12th, 2008 at 3:51 pm
Dear Johnnyb:

I respectively question your main assumptions:

1. “When the banks go bust, they are no longer able to create debt…”
2. “…the dollar supply has decreased while the supply of gold and silver has either increased or remained stable”

As for the first assumption, yes but someone is buying these failed banks (i.e. larger commercial & central, foreign & domestic banks/governments). The assets that remain are merely transferred to a bigger fish. The money to buy/salvage/bailout will ultimately be created out of nothing as you so rightly state. The absurd amounts being created virtually guaranty that the dollar will continue to go the way of the peso or some other backward third-world dictatorship’s worthless currency. The money continues to flow (to the top) regardless of commercial banks going bust. The fed continues to lower interest rates, and the devaluation of the dollar continues. I ask you most sincerely, how is it that the money supply has decreased when in the past few weeks close to a trillion dollars have been “injected” into the system and the number continues to rise with the passage of that latest fascist bailout bill?

I don’t know what the situation is where you live, but here in Toronto, Canada (big gold producer) I am having trouble finding quantities of bullion gold and silver coins from the local dealers and what is available is marked up insanely. Dealers are not holding their breath on orders from the Royal Canadian Mint at the moment. This would suggest a supply shortage in this time of high demand for tangible commodities and therefore an eventual rise in their prices, as the manipulation of the markets can not be maintained indefinitely.

I agree of course with your recommendation to become debt free, most prudent in a time like this.

Just some thoughts,
Cheers!