Wild Ride in Gold Prices
Gold has gone from a high of 632.90 yesterday just after noon to a low of 620.30 at 8:39 this morning. It is now at 625.60. The dollar has been slightly stronger, but most paper currencies have moved sideways over the period.
I cannot help but believe that the dollar price of precious metals is still being manipulated by central banks. The price of gold is too low when compared loss of purchasing power of the dollar. Unbacked paper currencies have value based upon the FIAT power of governments to force their use as "legal tender" and the acquiescence of people to use them. The latter source of value dwindles as people (around the world) begin to distrust the currency. We are seeing the early stages of this as Russian and Asian central banks have started reducing the amount of dollar instruments in their reserve. Were oil to begin trading in currencies other than the dollar, this will accelerate rapidly. When will this begin? It does not seem to be far away.
Tomorrow we will be "treated" the both the consumer and wholesale price indexes. These are the "very accurate" government reports on inflation. Each is cooked so much as to leave them without credibility. However, it seems that investors will act in the markets using these as a guide.
BEMA Gold (BGO) just released second quarter reports. The revenue more than doubled from the second quarter of 2005. These record earnings were reportedly due to the increase in the price of gold and increased production. This is one of the stocks in my core holdings. The last trade in BGO was at 5.26.
The mining stocks are proving more buying opportunities at present with DROOY at 1.28. The silver stocks PAAS at 20.50 and SSRI at 22.53 are holding up very well.
Best to each, Doug
I cannot help but believe that the dollar price of precious metals is still being manipulated by central banks. The price of gold is too low when compared loss of purchasing power of the dollar. Unbacked paper currencies have value based upon the FIAT power of governments to force their use as "legal tender" and the acquiescence of people to use them. The latter source of value dwindles as people (around the world) begin to distrust the currency. We are seeing the early stages of this as Russian and Asian central banks have started reducing the amount of dollar instruments in their reserve. Were oil to begin trading in currencies other than the dollar, this will accelerate rapidly. When will this begin? It does not seem to be far away.
Tomorrow we will be "treated" the both the consumer and wholesale price indexes. These are the "very accurate" government reports on inflation. Each is cooked so much as to leave them without credibility. However, it seems that investors will act in the markets using these as a guide.
BEMA Gold (BGO) just released second quarter reports. The revenue more than doubled from the second quarter of 2005. These record earnings were reportedly due to the increase in the price of gold and increased production. This is one of the stocks in my core holdings. The last trade in BGO was at 5.26.
The mining stocks are proving more buying opportunities at present with DROOY at 1.28. The silver stocks PAAS at 20.50 and SSRI at 22.53 are holding up very well.
Best to each, Doug
posted by Doug @ 8:45 AM
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