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Gold Report: NY Market Close (Gold/Oil = 8.77)
Posted by A. B. Dada on November 29th, 2005
Gold closed today on the NY gold market at US$499.90, but after hours open market pricing is fluctuating between US$499 and US$501.
Most international media outlets are reporting gold’s increase as a hedge against inflation, and some are noting higher demand for jewelry in India and other countries during the end-year months. U.S. media reports are not mentioning inflation as often as the international media outlets are, which is odd as the central bank continues to inflate the currency as seen in the M3 money output chart.
Gold discoveries continue to be reported around the world, which could lead to a greater supply of gold and help to keep the price from skyrocketing.
Gold bugs that hold gold as money and not as an investment prefer to see a steady increase in gold rather than leaps that might signify an investor-created bubble. As more central banks and investors start picking up gold for short term gain, we may see gains that are faster than the market would normally provide. Personally I feel gold is very undervalued, but if the majority of investors and banks pick up gold for short term gain, we’ll see ups and downs in short graph views, but a general upward swing as gold catches up to the inflation of the dollar and other currencies.
With oil prices dropping over the past few weeks, it is a surprise to see gold continue to move up. The US dollar also has been increasing against other currencies, yet all the currencies are being inflated by the central banks, so the continued rise in gold’s price is no surprise to me.