Look at what Gold Doing !! Still think there won't be a recession?

I have to say that I’m shocked at what's happened to the price of gold in err... the last WEEK. Take a look at the below link...

* Please do not post advertising links *

Now is this all because of the price of oil or is something else about to through the books like the Katrina impact?

Whatever it is it can't be good because gold is pretty much only a good investment when everything else isn't.
This is because unlike "paper" money and "paper" shares it can't disappear. And because of this it actually goes up in value when every thing else goes down.

Is this normal? Could some group somewhere know something everyone else doesn’t and be taking advantage?
Or is this just the bright sparks being bright sparks?

Med Edit: removed Link


[edit on 9/19/05 by FredT]

[edit on 20-9-2005 by John bull 1]

It's gone up 20$ in the past 2 weeks.. that's quite a jump..

Still don't know what it all means though..

It doesn't mean anything short of what the site he's linking to is selling.

A closer relationship exists between gold prices and inflation, that is, the rate of change in the general price level. Two periods particularly stand out: The high inflation of the early 1980s is matched by high gold prices, which definitely appear to "lead" the CPI inflation rate by about a year, a relationship that doesn't break down until 1988. The most recent decrease in the inflation rate also corresponds to a drop in gold prices, though that relationship is much more synchronous, without a clear lead or lag time.

A scatterplot diagram of high-lights the relationship more fully. The slope of the line suggests that a $100 rise in the price of gold is associated, on average, with higher inflation in the following year of 2.4 percent-age points. While gold prices do tell us some-thing about the inflation rate, it need not be either that inflation raises gold prices or that higher gold prices cause inflation. Some third factor, such as the money supply, may influence both.

www.gold-eagle.com...

Basically what it means is that mines have cut production, or are using a lower grade ore to drive prices up to make extra money. While gold and inflation are tied toegether somewhat, if you read that link, you'll see that there is a lot of gold that is stockpiled incase prices go higher, that they can release to bring prices back down. What happens is that if the price goes too low they artificially inflate the price by using a lower grade of gold, or by slowing down work at the mines, to bring prices back up somewhat.

[edit on 19-9-2005 by Zaphod58]

On 07/09/05 it was £7750 per gold Kg, on 19/0905 its £8380 per Kg. That’s a rise of £550 (7.09%) in 12 days!!!
Very sorry for the link being teleported into oblivion but some moderator (going by the name of FredT) thought it amounted to advertising. Well it just goes to show you learn something everyday!!!
Anyway to show I'm not advertising it is true that gold goes up and down a lot very quickly. But this recent rise is very unusual. I liked Zapod58’s inflation answer but inflation hasn’t exactly gone haywire over the last 12 days in the way gold has.
So its strange isn’t it? Is there anything in store for us that could be really, really bad?
Could it be that the federal reserves of oil are not going to be able to cope at the present rate? I heard that they could only keep things up for about 2 months (that was on another gold site so I better not post a link). Also understand that gold production is currently increasing, certainly it didn’t stop over those 12 days.

I am not advertising. So I say that if you buy gold you might already have missed out (and it’s not exactly my point anyway).
But what do you think has happened in the last 12 days that’s so damned special-could explain the sharp rise of this rather extreme “safety commodity”? Please help.

I think that since Super Storm Katrina and the "biblical" Flooding more people fear that the end of times, gods wrath is upon them. Fearing this they expect an economic collapse... Result, they buy more gold. More Demand for Gold Equals a higher selling price for Gold. As things get worse, the demand will increase and so will the price of gold.

Your Paper Money is worth nothing, Your Credit Cards, Bank Accounts, ... all of it. where is your true value if the economy collapses?

In 1920's in Germany they burned stacks of money to keep their houses and appartments warm. Because it cost less to burn the money then it did to buy gas/oil. This was the worst period of hyper- inflation in recorded history. Everything was too expensive, food wasn't even affordable anymore. And it wasn't because of shortages and the costs had to go up, no. It was because Paper Money lost its value almost overnight.


With all of the economic problems America is already faced with, including an illegal war in Iraq, and the 100 BILLION Dollar clean-up/mismanagement taking place in the aftermath of Katrina.

National Deficits the WORST in HISTORY. We are a Credit Card Nation, and eventually China and Japan are going to want their money back. Imagine China one day calls in all of our debts, because they are having their own problems, or because they are mad at us over Taiwan or N.Korea?

What if OPEC decides to use the yen or the Euro as its Oil Currency? Overnight you will see the dollar lose 50% of its value.

Just curious. Would it not be more useful, if you are converting wealth to usable/stable currency, to go to silver? How are you going to split a gold ounce to buy a gallon of milk?

I have a couple of silver bars I bought when I was a kid, seems like they would be more practical.

Also, why not buy Chinese currency since it is locked in value? Wait for the dollar to fall then buy dollars... make a killing it would seem.

Gold has been slowly going up starting in '02. It also had a bad day on Friday. Probably profit taking.

On the monthly charts it looks like it is in a trading range, so YMMV.

Roper