Gold blows through record highs, closes in on $1,100 per ounce
Gold is shooting toward $1,100 per ounce in trading today, already having blown through its record highs.
What's going on?
I wrote a lengthy piece on the price spike in gold in late September, when gold was on its big rise. You can read that piece by clicking here. The reasons for gold's continued spike today are the same as then: fear.
Fear of a continued devaluation of the dollar, fear of the massively swelling national deficit and debt, fear of consumer inflation, fear of anything that isn't a hard asset.
You want fear? Check this out: The government of India on Monday bought 200 metric tons of gold from the IMF, nearly half of the 403 tonnes that was up for sale in September. India bought all this gold at the height of the market, with no bulk discount. This of course drove up the price of gold.
There is a limited amount of gold in the world, above ground and below ground. As governments continue to hoard gold (China is doing it, too), the price will continue to climb. This is a direct comment on the rest of the world's faith in the U.S. dollar, which continues its year-long slide.
-- Frank Ahrens
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November 4, 2009; 11:12 AM ET
Categories: The Ticker | Tags: IMF, gold
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