GOLD $875 FRESH ALL TIME HIGH
January 8th, 2008Too much confetti, not enough exits.
Via: Forbes:
LONDON (Thomson Financial) – Gold hit a fresh all-time high above 875 usd in early London trade as a rebound in oil prices and further dollar weakness sparked a fresh round of buying.
‘Currencies and oil are the main drivers behind this at the moment,’ said Commerzbank analyst Rory McVeigh. ‘When stops were taken out at 870 usd we saw a real rush of buying. It’s held above 870 usd so we should see it consolidate now until the Americans come in later today.’
At 10.03 am, spot gold was up at 872.90 usd an ounce against 859.30 usd in late New York trades yesterday, having earlier hit a fresh all-time high of 875.80 usd.
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I’m hardly what you would call “sophisticated”, or even an “investor” for that matter.
But isn’t all this talk about gold being at an all time high totally deceptive, since they don’t adjust for inflation?
“But isn’t all this talk about gold being at an all time high totally deceptive, since they don’t adjust for inflation?”
Yes and No.
Here’s the YES argument:
http://www.zealllc.com/2006/cpigold.htm
Here’s the NO argument:
It’s NO because conventional technical analysis looks at prices, not inflation.
It’s tough to keep up in here, I know, but back in December I wrote:
https://cryptogon.com/?p=1799
Of course, lots of analysts call $850 meaningless, because the dollar has crashed in value since then. From a technical analysis perspective, a move above $850 will probably set off buy triggers as shorts move to cover.
So, I think the answer is Yes, it’s deceptive in real terms and No, it’s not deceptive if you’re a technician, which is this nonsense traders use in the market.
Of course, there’s no good way to determine a “real” price for gold because it is traded A) on margin and B) with fiat currency! HAHAHA
Talk about “totally deceptive”…
I firmly believe that commodity traders shouldn’t be allowed to speculate! You buy a gold futures contract, you collect the gold. You sell a gold futures contract, you deliver the gold. None of this buying and selling contracts without having to deliver or take delivery. That’s turned the whole thing to bullshit, like the stock market and FOREX.
But, we draw our squiggly lines and move on.
Gold is at $897 today — up $22 from when this post was made just 3 days ago.
If you’re not an investor, if you’re planning to buy-and-hold, then I agree that gold being at an “all-time-high” doesn’t mean much. It’s more of a psychological barrier for the market, and really shouldn’t influence your personal decision of whether or not to buy.