WORLD GOLD INDICES
Gold Seeker Weekly Wrap-Up: Gold & Silver Gain Over 1% & 2% on the Week By: Chris Mullen, Gold Seeker Gold traded mostly slightly higher in Asia and London before it dipped a dollar to $670.90 shortly after the New York open, but it soon moved back higher on the day and traded $1-$3 higher for the rest of trade before it ended with a gain of 0.25%. Silver dropped to $13.52 in early New York trade before it also traded higher for the rest of trade and end with a gain of 0.89%.Seven reasons why gold should surge from MarketWatch
Commentary: And how to play the move
Gold Stocks On the Verge of a Breakout
By goldguru
The historic price ratio of silver to gold shows that about 10 ounce of silver would buy one ounce of gold, a 10:1 ratio. Recently, the ratio is about a 50:1 ratio (with silver at $13/oz., and gold at $650/oz.) As the silver to gold ratio returns to historic values, from 50:1 to 10:1.
Almost all of the silver produced by the mines each year is consumed by industry, which leaves little to no room for substantial investment demand. The tiniest bit of investment demand will drive prices sky high.
Due to silver use, or consumption, lasting decades, silver may now be more rare than gold, in above ground, refined, deliverable, forms. It is estimated that there is about 300 million ounces of silver available to the market at the present time. There are about 125 million ounces of silver at the NYMEX, the big commodity exchange in New York.
posted by Larry Nusbaum at
6:44 AM
2 Comments:
Larry....
I question whether or not gold will "surge". I think most who speculate that are merely hoping, vs. any real logical analysis. What I believe is that we're at a new price range and are likely to see fluctuations around these prices for some time. I don't think we'll see moves higher or lower in a big way. Instead, I think we'll just moderate.
The price of gold is, for the most part, a function of the amount of cash available. With Central Banks around the world raising rates, or threatening to do so, it begs to question whether or not another surge is entirely plausible.
Also, I'm surprised we didn't see a drop in gold on Friday. Most likely this is because of the holiday. But, with NFP coming in showing no reason for the Fed to push rates lower, and instead push higher, again gold has no real reason to surge higher.
Another element that is possible is that equity markets look intent on pushing higher. Gold is a base level commodity that, if you'll recall, was largely forgotten when in the late 1990's we saw the high tech growth that we did. This is something that could happen again.
Just seems that a "surge" higher isn't as likely as most would wish for. The fundamentals don't support it in the long run.
1. A surge in gold prices, much higher from here, will not be a happy story.
2.The push up will not begin until late 2008 or early 2009 in the last two years of this commodity cycle.
3. The last 80% of the move up will occur in the last 20% of the cycle.
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