$1000 GOLD MOVING CLOSER
Editors note: Because we believe people should know and then prepare for what is coming, we include these articles. The first step is to seek the Lord, by fasting & praying, reading your bible. The next is to prepare physically. Then there are those who will stock up by buying metals, gold, silver, to barter when everything is brought down.
Gold price pushes ahead despite growing private and scrap sales
The gold price is confounding some detractors as it continues to rise despite a sump in jewellery demand and a rise in scrap coming on to the market.
by: Lawrence Williams
Friday 1, 2008
www.mineweb.com
Friday 1, 2008
www.mineweb.com
JOHANNESBURG –
By all accounts, sales of gold scrap, and even of gold jewellery, are now hitting the market, while sales into the jewellery sector are weak, but even so the gold price has been moving ahead steadily over the past week or so. To an extent the additional supply coupled with lack of jewellery demand is currently being counterbalanced by anticipated production shortfalls from the South African mines as a result of the recent power problems in southern Africa.
What is particularly interesting in terms of the gold market is that when it reached its old $850 peak back in 1980, it was this phenomenon of offloading old gold in line with the higher price, coupled with falling demand as the jewellery sector held off buying through nervousness, which caused an almost immediate gold price slump bringing the yellow metal’s price down almost as sharply as it had then risen. This just hasn’t happened this time around – or at least not yet, although the price has come back fairly sharply in afternoon trading in London today.
Despite dire warnings of the slump in jewellery prices and reports of privately held gold being sold back into the market, particularly in the Asian markets, overall gold has continued to rise meaning that now gold is well and truly in the monetary sector again (not that it ever really left it), despite years of Central Bankers trying to talk this aspect down, with commodity aspects seemingly having little impact on the continuing upward path of the metal price. Bankers, and many economists, seem to feel offended by the fact that a metal can be seen as, in many eyes, the ultimate currency – hence the famous ‘barbarous relic’ description by John Maynard Keynes in 1931. Today (Friday) the barbarous relic set yet another new record reaching over $936 an ounce at one time. Day by day $1,000 gold has been moving closer.
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History suggests, though, that weak jewellery sector purchases can be shortlived as the market ultimately comes to terms with the higher price levels. If the latest GFMS assessment for Societe Generale that public sales will likely be at a lower level in first half 2008, the a fair number of the positive and negative aspects for the gold price are actually cancelling each other out.
This means the principal driver is still dollar weakness and with aggressive Fed interest rate cuts in an attempt to stimulate the US economy, coupled with the latest unexpectedly poor jobs data, greenback weakness, or at least the perception thereof, has to be continuing and given that the economy cannot turn round overnight there are likely to be at least bouts of dollar weakness over the next several months – and maybe for longer.
This does suggest that gold’s upward path will continue in the near term a least, although there could be occasional setbacks in the upward path as some factor or other impacts an easily spooked market. And the higher gold rises, the easier it will be for an occasional sharp setback to occur.
The gold price optimists will take such corrections to be buying opportunities and at the moment it is almost certainly the optimists who are calling the tune.
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Originally posted 2008-02-05 07:10:27. Republished by Blog Post Promoter
