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Gold Is Likely to Continue Its Climb; Hits Record Near $1120
MATT WHITTAKER And KELLY NOLAN
Wall Street Journal
Wednesday, November 11, 2009
Gold likely will continue to build on its string of record prices as speculative buying shows no signs of abating, preventing any break in prices in the near term, some analysts said.
The expectations of higher prices, sustained dollar weakness and the fear of inflation because of government economic-stimulus measures have lured speculators. This dollar-driven speculative investment has been the main thrust behind gold’s price rise, outweighing slow jewelry demand and easily absorbing scrap gold sales and metal sold by miners.
Most-active December gold notched a record of $1,118.60 a troy ounce in intraday trading on the Comex division of the New York Mercantile Exchange on Tuesday, driven by fresh ideas that U.S. interest rates will remain low and keep the dollar depressed. In midday trading Wednesday, gold was up 1% to $1,113.20. For November, December gold has risen about 7% and is up about 25% on the year. The Dollar Index, a trade-weighted basket of six currencies, was at 74.853 from 75.052 on Tuesday.
(ARTICLE CONTINUES BELOW)
Late Tuesday, Federal Reserve Bank of Dallas President Richard Fisher said there are risks to keeping U.S. interest rates low for an “extended period” and acknowledged the weight that has on the dollar, but said because inflation likely is to stay low it isn’t a concern.
With the dollar likely to stay down, gold will remain attractive as an alternative currency.
“Until the dollar puts in a convincing rebound, then the onus is to the upside in gold,” said Jim Steel, senior vice president and metals analyst with HSBC.
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20 Responses to “Gold Is Likely to Continue Its Climb; Hits Record Near $1120”
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November 11th, 2009 at 12:26 pm
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November 11th, 2009 at 2:43 pm
Its like the titanic hit the iceburg and is sinking fast and instead of getting in the lifeboats yall are bitchin at each other, the ship is not coming back up people. margarita island is full of opportunity cheapest cost of living in the world, 6 cent a gallon gas free health care no taxes, no hurricanes, all food is organic by law. for more info check out http://www.escapethestates.com I have plenty of references from people I have moved down here, jump on the underground railraod and find out what it is like to live in a country that has alot more freedom then the united states. Put your money in a different currency and get out with it and dont look back. soon the dollar will be worth nothing, then you are stuck. thanks for listening, if you need help contact me, My wife and I have plenty of knowledge about living here on margarita island we moved here 3 years ago with 3 small children and 3 dogs. We had to get our kids away from the toxic foods and environment. We can help you escape the states no matter what situation you are in,
November 11th, 2009 at 9:01 pm
Do Logic, I have been reading your posts regarding a bear trap being set for gold. Can you please explain your logic so the average guy will understand. Thanks in advance.
November 12th, 2009 at 12:26 am
UES AS I HAVE SAID BEFORE AS THE US DOLLAR GO DOWN IN VALUE GOLD WILL CONTINUE TO RISE !
COMMING SOON IS THE G-20 WANTING TO DEVALUE FOR DOLLAR !
THEN THE KO PUNCH AS THE MIDDLE EAST OIL GIANTS REFUSE TO TAKE THE US DOLLAR FOR OIL AND THE USA IS FORCED TO BUY EURO TO BUY OIL ?
BY THIS TIME THE STOCKMARKET WILL TAKE A NOSE DIVE TO THE BOTTOM/CRASH !
GET READY FOR THE SOUP LINES, THERE WILL BE ONE NEAR YOU !
YOU MIGHT THINK THIS IS A JOKE BUT I KNWO THAT YOU WILL BE CRYING THEN !
NOTE ALL THE SPENDING ON THAT PRINTED MONEY WILL ALSO HELP TO DESTROY THE US
DOLLAR ! REMEMBER NOT ONLY GAS WILL GO UP, EVERYTHING YOU BUY WILL SKY ROCKET IN PRICE AMERICA !
I HOPE YOU DON’T SAY, NO BODY SAID ANYTHING ABOUT IT COMMING .
AMERICA YOU WHAT BEEN WARNED AND UNLESS YOU DO SOMETHING ABOUT THE COMUNIST DEMO-RATS CONTROL ON YOUR GOVERNMENT YOU WILL BE A HURT & AFTER THE FACT NOTHING YOU DO WILL HELP AMERICA !
THE DEMO-RATS HAVE TO BE STOPED A.S.A.P. AND THE GOVERNMENT OF THE FOUNDING FATHERS RESTORED NOW !
WHEN YOU ARE ON THE SOUP LINES FOR FOOD, THE DEMO-RATS WILL BE LIVING IT UP ON YOUR TAX DOLLARS AND THEY WILLN’T BE ON THE FOOD LINE ?
THE WAKE UP CALL IS HERE AMERICA AND DO SOMETHING ABOUT IT VOTE THE BUMS OUT OF PUBLIC OFFICE AMEIRCA !
YOU WILL HAVE TO FIGHT FOR YOUR FREEDOM AMERICA AND VOTING IS YOUR WEAPON FOR CHANGE AMERICA
STOP THE COMUNIST EXPRESS AMERICA, VOTE THE BUMS OUT OF PUBLIC OFFICE NOW !
GOD BLESS AMERICA & GOOD LUCK
November 12th, 2009 at 1:28 am
(The following is said with an accent often heard from stage actors and intended to convey drama and sinister intent. All the trappings of truly rotten cinema!)
Why? You ask me to carry the mind of the average guy into a world of secrets, secrets so dangerous and dark, I must hide them, even from myself!
Now, to move on… without the accent…
Why? Most people don’t understand the concept of “trend”, much less display the ability to comprehend a multi-generational bait-n-switch. They also need to understand that the economy is based in the transaction and not the product, commodity, or labor end of a … well, whatever. I have spent 35 years learning this stuff, some the hard way, and it isn’t easy to understand. My laughter is more sardonic than anything else, the mockery is based in sadness. That being said;
“What Does Bear Trap Mean?
A false signal that the rising trend of a stock or index has reversed when it has not.
Investopedia explains Bear Trap
This can occur during a bear market reversal when short sellers believe the markets will sink back to its declining ways. If the market continues to rise, the short sellers get trapped and are forced to cover their positions at higher prices”
Also:Try reading what Mr. Jim Rogers has written and listening to what he has said. I have for over twenty years. He has written that he believes that the DOW will rise to 1,000,000. He has also written and said that gold will rise to $2,000. Since you don’t know what that means, I will explain it to you. The DOW is intended to be number equal in dollars to what one share each of each company in the list comprising the DOW would cost. No bankrupt (or bancrupt) company is listed. Today, if you bought one share each of each company on the list, it would cost just over $10,000. Just to make the math easy, we will work with round figures and go with $10,000 in gold vs the DOW. If Mr. Rogers means what he says, he believes that the gold will go to $20,000, but the DOW will go to $1,000,000, yet he recommends buying gold. Why is that?
Lots of people think a possible scenario is that the dollar will crash, we will be forced to convert to the “Amero”, and no other currency will be considered legal currency (including gold and silver). If that is the case, even gold will convert. Let us say all converts 1/2 of 1 cent to the dollar. What this means is that you will get 10 Ameros for your 1 oz. of gold, but I will get 5000 Ameros for my DOW. Tell me, which is worth more?
Anyone thinking gold, or anything else, anything at all, has intrinsic value is wrong. How they are wrong depends on the premises from which they start, but wrong they are. This is because the “value” is an imposition on the world placed there by human need and desire. These needs and desires are met by effort. This effort is organized, “more” organization “there”, “less” organization “here”. The more organized the effort, the more abstract the tools. One of the tools used is called “money”. Money is used to store excess effort. All of this effort is best described as a search for energy. Humanity has more energy available to it than at any other time in our combined knowledge. This energy storage continues to grow faster than we are using it. As this stored energy grows larger, the value of each bit of energy decreases. Two additional concepts become important here, one is entropy, the other is resource competition.
Entropy:
The longer energy is stored, the greater the entropy. The greater the entropy, the lower the value. The lower value serves no one.
Resource Competition:
Gold and other items used as money exist as such because of other tools called laws. Gold and silver were used tools to limit the economy in the past, kind of like a throttle block. This limited the amount of resources available to the general population. If gold, silver, or other commodities are use as the only value store, this does not limit resources, but does limit access. This limited access serves no one.
Given all of the above being true, all things decrease in value over time, but not in a straight line down. How does this help? I really can’t say, because I am not you. As for the current bear trap about which you spoke, perhaps it will help you understand that THERE IS NO WAY GOLD IS GOING TO BECOME THE ONLY “MONEY” EVER AGAIN. People in Brazil, rural China, and India want indoor plumbing and refrigeration. They want to watch “Saturday Night Fever” on 60″ Projection Screen TV’s, just like everybody else. If the economy tanks, they will not get these things, and accepting gold as the only “real” money will guarantee this. These truths GUARANTEE gold will rise and fall in value due to two things. One is it’s use in commercial applications (Jewelry, Decoration, industrial uses, etc) and the other is dependent on how many people can be conned into believing gold has some special property within it which confers a value not found any other way, enabling gold to avoid entropy.
There is more … later
Steve Reply:
November 12th, 2009 at 1:27 pm
You don’t know what you are talking about. Let me explain in simple terms, gold is the money of kings, silver is the money of gentlemen, barter is the money of serfs, and debt is the money of slaves. Federal reserve notes are from a debt based system that falls under Admiralty jurisdiction also refered to as Maritime law or the law of the sea. Article 1 sec.10 of the Costitution says no “State shall make any Thing but gold and silver Coin a Tender in Payment of Debts”. The Constitution is the law of the land our domestic law also known as our common law, see the 7th admendment where it refers to dollars and the common law. A U.S. dollar was set by the U.S. congress as 371.25 grains of silver under common law jurisdiction as set down under article 1 sec. 8, ” the congress shall have the power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the standard of Weights and Measures”. Federal reserve notes are an integral part of the Public National Credit System which is provided by the Federal Reserve. Right now we have a paper dollar bill, a metalic presidential dollar coin and a 480 grain one oz. silver dollar coin in circulation. None of these units of value equal each other as if a dollar is not a fixed value. The U.S. congress has the constitutional power to regulate commerce, see article 1 sec. 8, and brought in Federal Reserve Notes to be used as legal tender in commerce. This is illegal by our Constitution and all laws are now enacted under the commerce clause. The states never gave the U.S. congress the power to regulate commerce on the land under Admiralty jurisdiction only Constitutional common law jurisdiction. The people have been confused and taught that the Constitution is the law but they interact in commerce under Maritime law when using Federal Reserve Notes. Our courts are Admiralty courts and these judges can preside over Admiralty as well as common law cases, notice the gold fringe on the flag in the court. A common law court can’t preside over an Admiralty case. As a prime example a common law court would not recognize a Federal Reserve Note as having a monetary value. The law of the sea was brought onto the land and our gold and silver coin was taken out of commerce in order to subjugate a free people.
Do Logic Reply:
November 12th, 2009 at 2:47 pm
You are joking, right? Gold is the money of kings… been there, done that. In a MODERN sense, gold is the money of no one. No federal, national, monarchy, or any GLOBAL CLASS institution uses only gold as a store for the treasury. I know all of the rest, but none of it is relevant to the question I was asked, which was (paraphrasing here) “please explain your logic regarding a bear trap in the gold market”.
Steve Reply:
November 12th, 2009 at 6:51 pm
The stock markets are controlled, the Dow Jones Industrial average has little to do directly with industry, take Wall Mart for example. The DOW is measured in arbitrary units of credit and trends and charts in the ethereal world of this credit will be of little use from now on. There is no trap in the gold market only a chance to be saved from the destruction of the Public National Credit System.
November 12th, 2009 at 1:58 am
Do Logic. Don’t quite agree with you, S=Klog+c Mmmmm. Well thats that side of things. The other side is, and this is a real laugh, your government up there in Washington has sold the lot. Ft. Knox is empty ! (Well apart from the IOU note.) Ah right, its all in West Point, who are they trying to kid. Its all gone folks, even the stuff at the base of the twin towers. (Who has that folks ???
Tickertape has no value, its for throwing onto the streets !
Just try and spend a us dollar in Saudi, they will laugh at you. What do you think are on these camel trains ? Well I will tell you. Its sacks of MTT’s. bet you haven’t a clue what that is ?
Do Logic Reply:
November 12th, 2009 at 2:54 am
Are you saying that you don’t agree with my assertion that savings in the form of gold are stored energy and that this energy is subject to entropy? It isn’t surprising that you don’t understand entropy, most don’t. Don’t worry your little head about that. Why don’t you take some gold down to the corner store and buy some aspirin. Well, first you would have to convert the gold to the local currency.
As for the Saudi local economy not using dollars, so what? When I go to another country, I convert dollars to the local currency if the locals will not accept dollars. Big deal. You appear to hold the belief that it should be otherwise. How many bars in NYC or anywhere else will let you pay for a beer using yen? There may be some, but I doubt it. They would just laugh. In any event, the dollar has a value. This value changes. As the value goes down, Americans will buy less goods made in other countries. Tell me, what happens in other countries when this happens? Do they lose jobs? Where do the lost jobs go? If all of the jobs go to China, and no one else is working, does that mean that everyone will starve? Once that happens, do the Chinese all die from starvation as well because now they have no customers? Once that happens, what will be the value of gold?
P.S. Thank you for providing a good example of why it is impossible to have a decent conversation regarding this issue. As for MTT’s in a sack on a camel’s back, the fact that it rhymes cracks me up.
Steve Reply:
November 12th, 2009 at 1:55 pm
Let me explain further. If you store your labor in Federal Reserve Notes you are doing it in a public way or venue and you receive payment when you exchange these debt based notes when you buy a sack of potatoes for example. Receiving these FRN’s for your labor is considered by law a discharge of an obligation. If you receive gold or silver for your labor then the debt has been paid at law and you can now store your labor in a private way. A Federal Reserve Note has no intrinsic value, it has no real store of value and the issuers can devalue it when they want. You are just as confused as the financiers who issue FRN’s want you to be. You need to understand the difference between a dollar and a dollar bill.
November 12th, 2009 at 3:36 am
Why is the whole world watching James Damiano?
http://www.viddler.com/explore...../videos/7/
November 12th, 2009 at 8:00 am
Time will tell Do Logic. You keep your “Tickertape” I’ll keep my gold.
MTT’s are “Maria Theresa Thaler’s” Now that is money. Wait till you cannot use “Tickertape” to buy oil and you have to change into “Euros” to buy it.
As to using gold to buy anything, yes indeed, that is just what I have to do, I have a little scale and although I do not need aspirin, I need most other things. The scale is to weigh gold from my little leather pouch. The process works very well, for I collect my gold from my mine every week. And I pay my boys in gold. You see, a guy up the road a ways. Decided to print money ! Print money notes like there was no to-morrow. You know like your african does. This guy up the road broke one of the best countries in the world, believe me it was and to some degree, still is. Zimbabwe. Watch your guy do the same for you, then after that, we shall see how arrogant you are.
November 12th, 2009 at 8:37 am
Thank you Do Logic and also Roy Rodgers, very interesting discussion on what will be a “store of value” going forward. What will both of you do to protect yourself and your assets going forward? Lets assume that the dollar will tank and the financial paper assets(stock markets, ETF’s) will be worthless. What is the best advice either of you can give. Thanks in advance.
November 12th, 2009 at 11:36 am
AJ “ASSUMES” that EVERY article in EVERY newspaper he looks at/reads from
is telling us the gospel 100% truth about EVERYTHING they write
just because its a Reiter’s or AP article
DOES NOT MAKE IT NECESSARILY TRUE…including and especially articles about gold or silver
i was told to believe 20% of what i read and hear when i was a kid
[and NOT BELIEVE 80%]
nada has changed either..
November 12th, 2009 at 11:38 am
@ Roy
Extraordinary claim There about MTT. So, the Saudi’s have sacks full of these things. I suppose you did know that even if the Saudi family has all Thaler’s ever made, the total value wood be less than 10 Billion in US Dollars. This is about 1 week of revenues from the oil wells. But you knew that, right? I wonder what they do with the other 51 weeks of revenues? Do they buy the silver from each other and drive up the price? Perhaps that would explain a few things. Maybe you are onto something there!
As for Euros, so what? I believe it unlikely I will need Euros to buy oil for my automobile. If you wish to “mix metaphors” (as it were), go ahead. I prefer not to confuse myself but you may confuse yourself if you wish. Perhaps you are more comfortable in a confused state.
How do you guarantee the quality of the gold you carry? Does everyone in your area have a little kit or perhaps a furnace? This must be cumbersome! I guess everyone just has to trust that you haven’t adulterated the sample, like they do with iridium and ruthenium in India. Carrying bottles of hydrochloric acid around must be “troublesome”. Have you ever accidentally killed anyone with chlorine gas?
@ concernedcdn
If you say you wish to assume that the dollar tanks and all stocks and paper money are going to be worthless, you are either ignorant or lying. Which is it? In either case…
November 12th, 2009 at 11:42 am
@ Roy
Extraordinary claim There about MTT. So, the Saudi’s have sacks full of these things. I suppose you did know that even if the Saudi family has all Thaler’s ever made, the total value would be less than 10 Billion in US Dollars. This is about 1 week of revenues from the oil wells. But you knew that, right? I wonder what they do with the other 51 weeks of revenues? Do they buy the silver from each other and drive up the price? Perhaps that would explain a few things. Maybe you are onto something there!
As for Euros, so what? I believe it unlikely I will need Euros to buy oil for my automobile. If you wish to “mix metaphors” (as it were), go ahead. I prefer not to confuse myself but you may confuse yourself if you wish. Perhaps you are more comfortable in a confused state.
How do you guarantee the quality of the gold you carry? Does everyone in your area have a little kit or perhaps a furnace? This must be cumbersome! I guess everyone just has to trust that you haven’t adulterated the sample, like they do with iridium and ruthenium in India. Carrying bottles of hydrochloric acid around must be “troublesome”. Have you ever accidentally killed anyone with chlorine gas?
@ concernedcdn
If you say you wish to assume that the dollar tanks and all stocks and paper money are going to be worthless, you are either ignorant or lying. Which is it? In either case…
November 12th, 2009 at 11:52 am
Oops! Should be “would” instead of “wood”. At times, English is my second language. Sorry.
November 12th, 2009 at 8:11 pm
@Do Logic,
Did not want to come across ignorant or lying, this discussion seems to be a fait accompli if you listen to the financial prognosticators on the boob tube in Canada. Really, I just wanted to know how others may be planning to protect themselves should the worst happen.
Thanks in advance.
Ps. @ Roy, where do you stand on this issue.
Do Logic Reply:
November 12th, 2009 at 9:25 pm
If the dollar tanks and all other paper (as you call them) assets collapse, the only things that will have value are consumables, seeds, and weapons. The likelihood of this is very low. Of course, you seem to want a guarantee and those litter the ground. Bend over and pick one up,eh. You could spend all of your money on food. Once you have a 5 year supply, rotate old stock into your belly and began buying weapons. Once you have what is a comfortable supply of these, buy seeds. This is what humanity has done and is why prices are collapsing, we have all we need of everything. Next comes trying to figure out where to store excess labor. You are right back where you started, good job!
Do loop.