Will gold leap again as a hedge against the USD?
With the slide of the USD will we soon be seeing investment in gold as a safety device against the falling dollar start to take off?
I know I have been talking gold up for two years now, yet I'm still saying gold is going up a lot more yet.
It has reached $1588 today. I will make another leap of faith..........I believe it will continue to rise.
It may hit a couple of sharp losses on the way up as it has recently again, but I see no way it will fall out of bed like the dollar did.
Extraction costs that have been a factor for some small miners in not participating will have little effect on the market although some will be able to commence operations based on a reasonably profitable price for gold.
There are fewer investors who are going to want money sitting in unleased real estate, or investing in currency in the current environment, especially since economies the size of Italy and Spain looking like basket cases.
I believe there will be another flight from the dollar, and gold's reputation for intrinsic value and eventual retainable value will be very attractive.
You can't print gold and create debt with it in the same way that many countries have.
Without any secure long term solutions for the borderline countries in the EU who are going to re-schedule their loans, as the truth is they can do nothing else, and the banks have no choice but to take a hit with them despite trying to hike the interest paid, the income will not be there to support it. You don't cause recoveries with contraction, it always means there will be less of everything not just debt, but the capacity to service it as well.
There is a lot of money changing hands amongst the bigger Australian gold mines as you would know and the writing is on the wall for gold to go ahead in any economy that is in trouble with it's currency.
I look forward to your comments.