Gold Jumps to Another Record
The nearby gold futures, for October delivery, ended Friday at an all-time high, settling up $8.30, or 0.6%, at $1,316.10 per troy ounce on the Comex division of the New York Mercantile Exchange.
Gold for December delivery, the most actively traded contract, also settled up $8.20, or 0.6%, at $1,317.80 a troy ounce. The settlement marked a new all-time high for the most actively traded contract, which also set an all-time intraday high of $1,322.00 per troy ounce in electronic trading overnight.
A weaker dollar helped gold prices maintain their upward trend. Dollar-denominated gold contracts benefit from a weaker dollar as it attracts buying from traders using foreign currencies. Gold is also considered an alternative currency.
The case for and against 3000$ Gold (Part 1 of 2)
The case for and against 3000$ Gold (Part 2 of 2)
Historical Hedge against inflation: One of the big reasons why investors have gone to gold is because historically it’s been a good hedge against inflation. The reason is quite simple. When money starts to lose value, hard assets such as gold keep their “relative value”. What I mean is that if the value of currency goes down (inflation does that), money invested in gold will generally more or less keep its value. Since inflation is usually triggered by central banks “printing money”, you can imagine how many are worried about this problem given the way the Treasury resolved the past crisis. Many believe it could take a decade to see inflation pop up but eventually it will.
Hedge against apocalypse: Increasingly, many believe that at any point in time, the whole system could collapse. The idea of course is that our system is based on belief. Belief that currency will be worth something, that banks will be able to pay back deposits, etc, etc. After the major crisis and smaller events such as May’s flash crash, there are more doubters about the system and some believe that there is at least a possibility that it could all collapse. Will it happen? Very unlikely. But if it did and we did return to a “simpler” way of life, Gold’s value would almost certainly pick up big time.
Comment: I've not a clue where Gold is going. I sense that it is overpriced right now but I really don't know. If interested in investing suggest 1 oz coins. A good site for this is www.apmex.com. Of our own investments we are about 1.4% in Silver and Gold. (Silver is a little easier to buy as one can purchase 20 1 oz Silver coins for about $ 540.