Home / Gold News / Blog article: Gold Resumes Climb
Previous: History Lessons
Next: Egyptian Expertise!

Gold Resumes Climb

June 30, 2008

After hitting $1,000 an ounce, gold backed off as is usually the case when a major psychological level is hit. Gold dropped back to the $875-$900 tradning range until last week. With the price of oil going up and the European Union considering raising interest rates, pressure on the US$ is great indeed. Thus gold is trading in the $925 range now.

Who Wants Cheaper Auto Insurance?

Jim Rogers, who in April 2006 correctly predicted oil would reach $100 a barrel and gold $1,000 an ounce, said investors should steer clear of the dollar as the U.S. economy slows and favor commodities this year. The dollar has slipped 7.7 percent against the euro and 5.9 percent versus the yen in 2008 as the Federal Reserve cut interest rates to stave off a U.S. recession. Oil prices have doubled in the past 12 months, while gold is up 44 percent.

Avoid the dollar “at all costs,” Rogers, chairman of Rogers Holdings, said in a speech in Shanghai today. “The best investments in 2008 are commodities (can you say gold?) and natural resources. Agricultural prices have much higher to go over the next decade. We have a shortage of everything, including seeds.” And with the Midwest floods, grain prices will even be further increased.

Oil and metal prices in New York have surged as a slumping U.S. currency made them cheaper for non-dollar investors to buy as a hedge against inflation in a slowing global economy. The dollar has stabilized in recent weeks, with currency volatility falling by the most since 1999 this quarter.

And if Israel makes an attack on Iran’s nuclear facilities you can count on oil at $200 a barrel and gold at $1,200 almost over night! The odds of there being a strike on Iran’s nuclear facilities within the next 6 months are 60-40 and growing as the rhetoric on both sides increases.

Overall, it’s not a pretty picture in the financial market, nor the world in general. Oil at $143 a barrel and inflation more than double what it was last year only adds to making GOLD the safe haven. Gold loves fear of war, inflation, and uncertainty. Could it get any better for gold than it is now? :-(

Written by Ernie · Filed Under Gold News 

Comments

Got something to say?





Houston Area Labor Lawyer - Wrongful Termination, Severance Negotiations, Sexual Harassment Suits