The price of Gold.

jimmyc1985 · Post by **jimmyc1985** » Thu Oct 18, 2007 3:27 pm

Don't follow commodity markets myself Filth, but i'd assume the depreciating US Dollar would at least partially explain this. All commodity prices expressed in US Dollars are pushing upwards commensurately with the depreciation in the US Dollar vis-a-vis other currencies. I know oil has also been rocketing recently in terms of US Dollars per barrel.

Whilst the Australian dollar has been appreciating against the USD quicker than other currencies, the USD has depreciated by about 10% over the last year and 5% since September when measured against an aggregated basket of currencies, i.e. a trade-weighted index. See below:

http://quotes.ino.com/chart/?s=NYBOT_DX

That's a partial explanation, i suppose. Doesn't explain a ~15% increase in the price of gold in the space of a month, however.

keri · Post by **keri** » Thu Oct 18, 2007 3:46 pm

Jimmy gives a good explanation of most of the reason, but there's also the fact that gold in the commodities market becomes more in demand in times of economic fluctuation, which inflates it's value.

At least that's my understanding.

jimmyc1985 · Post by **jimmyc1985** » Thu Oct 18, 2007 3:58 pm

Filthy wrote:All I know is, is that I have to padlock the missus fingers when she goes out....they're worth more every day!

. I think the wallets of wives are a bit like the fallout from an asset bubble: you see things which give you a clue that something's awry, but you don't know the magnitude of the damage until the day of reckoning arrives!

keri · Post by **keri** » Thu Oct 18, 2007 4:13 pm

Which is why I stay the hell out of the whole thing and watch from the sidelines.

pevfan · Post by **pevfan** » Fri Oct 19, 2007 3:59 pm

Well, with Armageddon Man talking about WW111, I'm not surprised at the rise in the Gold price.

Never underestimate the power and influence of the religious right in America. They believe literally in everything the Bible says. They actually WANT Armageddon to come because that's when the Messiah (no not CJ)will return. Not a religious man myself but appartntly it's all there in Revelations.

And these are the people that are behind dear old Dubya don't forget...I tell you, the more I read and learn about this man the more he frightens the livin daylights outa me. I don't reckon he'd stop short of anything and then he'd tell the world (or what's left of it) that God told him to do it.

You know, I had a terrible thought the other day...what if this man had been around during Kruschev's time...do you reckon any of us would still be around today to talk about it....?

Think I might by some Lihir tomorrow.

hillchaser · Post by **hillchaser** » Fri Oct 19, 2007 5:10 pm

All my reading is saying the basically the US paper currency is stuffed .. since they just keep printing it...The US currency is being devalued by the day and the only way to protect against inflation in the US is to hold gold...

If it wasn't for our resources making a strong Aussie Dollar then we should be buying gold (or oil) too.

Of course I'm not smart enough to work this out myself but I've been doing a lot of reading.

http://www.321gold.com/editorials/casey ... 01807.html
this sums it up too

http://www.321gold.com/editorials/moria ... 01807.html

BTW : are you back in now or still sitting out ?

jimmyc1985 · Post by **jimmyc1985** » Sat Oct 20, 2007 12:52 pm

US market was down almost 3% overnight after progressively getting worse throughout the day, so expect the ASX to be off a similar margin on Monday.

As much as i couldn't give a fart about the direction of the market, one figures there's plenty more downside than upside risk at the current level of ~6700. I wouldn't attempt to nominate an exact bottom but i wouldn't be surprised if it drifted back toward, and possibly below, 6000 over the coming weeks/months. Depending on this week's CPI report, the decline could also be quite precipitous.