Gold Soars as Financial Crises Get Worse

Only twice in the past 20 years has the price of gold jumped at least $50 in one day – on Sept. 17, 2008, and last Friday. In both instances, the price of gold reached $800, though it did not reach that level until after the Comex closed last Friday. Gold set all-time highest price records in several currencies including the British pound, Indian rupee, South African rand, and Australian dollar.

Readers of this column should not be surprised by this sharp increase; as of the morning of Nov. 24 gold is up to over $825. A few weeks ago, I pointed out several upcoming near-term events where it would be likely that those manipulating gold prices downward would probably make their moves. The last of those events, the expiration of the December gold and silver options contracts, occurred last Thursday.

Once these events were out of the way, I anticipated that there would be much less impetus to suppress gold prices. What I did not foresee was that the Dow Jones Industrial Average would fall to five-year low and the Standard & Poors 500 Index would hit an 11-year low last Thursday.

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There is growing investor fear in the financial markets. I suspect, though I have not seen any data to prove or disprove this idea, that U.S. government officials gave orders to their trading partners on Friday, Nov. 21 to deploy all their resources to push up the DJIA. It is possible that the focus on manipulating the stock market may have left the gold market relatively free to rise on Friday.

The mainstream media reported that stocks rose on Friday because of the good news about who President-elect Obama may appoint as his Treasury Secretary. However, I think this was only a cover story to avoid revealing the extent to which stock market prices have been continuously manipulated this year by the U.S. government.

• A d v e r t i s e m e n t

There is certainly a lot of information coming out to support higher gold prices.

” The World Gold Council reported early last week that gold demand, as measured in U.S. dollars, set an all-time quarterly record in the third quarter of 2008. It also stated that gold demand in the third quarter, as measured in metric tons of gold, was the second highest ever, topped only by the second quarter of 2007.

” The story that the Chinese government might be looking into adding substantial gold reserves now has a quantity attached to it – 3,400 tonnes (109.3 million ounces). This amount of gold demand exceeds worldwide annual newly mined gold production by 50-75 percent.

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