03 November 2009

Gold, gold and gold!

This afternoon, gold futures reached an all-time high at 1,085.30/oz (COMEX Dec contract), following the purchase of 200 tonnes of gold by India from the IMF for about $6.7 billion. Well done India!

The last gold hangover is now withdrawn: gold sales by the IMF will easily be absorbed by emerging economies. I also doubt China will stay on the sidelines watching India catching all this gold against worthless paper without getting their piece of the cake. Whatch gold and take any fallback as a buy opportunity. Gold is on its way to it record high, at 2009 prices US CPI deflated, of $1,600/oz.

For the US and Europe, they have no money left and over all would not like to send a signal of lack of confidence in fiat currencies (and the USD in particular) and expose to the public the wrong policy followed by many European central banks: selling the jeweleries for hot air. Don't forget that Mr. Brown, the current UK Prime Minister and then Chancellor of the Exchequer, initiated this irresponsible policy in the UK during the second half of the nineties when gold prices were at the lowest (in the $250-300/oz range) at the same time Tony Blair was dramatically increasing the number of civil servants and digging deep in the fantastic work undertaken under the tenure of Margaret Thatcher and to a lesser extent John Major...

What best than the shift in gold possession is exemplifying the shift of power from the West to the developing world?! It also says a lot on the lack of understanding of challenges faced and short sighting by policy makers in the West. Worrying.


US gold hits record high $1,081.70/oz on IMF sale

Gold Climbs to Record as India’s Central Bank Buys From IMF