New Record Gold Price!

December 1, 2009 Gold Investment, Gold Stocks, Predictions No Comments

Just a quick update on a new record gold price. Gold remains bullish, shaking off the Dubai Debt Bomb scare as investors realize that there is no flight to safety in the dollar. Gold is coming into its own right now, and this will not be the last new record gold price!

Gold Touches $1,200!

The dollar and gold are inexorably bound at the hip for the time being. The dollar has a lot further to plummet because the U.S. government refuses to support the and is hell bent on paying off their outrageous spending binge with deflate dollars. There will be know change in this policy until sanity returns to the U.S. government, hopefully beginning in the 2010 midterm elections.

Dollar Resumes Drop 120109 New Record Gold Price!

Gold Resumes Its Rise While The Dollar Resumes Its Descent!

Gold (Silver is included in this statement) is one of the only investments that is going to continue to rise in this environment.

Gold hits record near US$1,200 as dollar slips

Jan Harvey, Reuters Published: Tuesday, December 01, 2009

LONDON — Gold hit record highs near US$1,200 an ounce on Tuesday as dollar weakness fueled buying of the metal as an alternative asset, while investors speculating on more gains were cheered by recovery from last week’s setback.

Spot gold hit a peak of US$1,198.70 an ounce and was bid at US$1,190.20 an ounce at 1315 GMT, against US$1,179.10 late in New York on Monday.

“The fact that we are seeing the dollar weaken is helping to drive gold,” said Ole Hansen, senior manager at Saxo Bank.

He said investors had been encouraged by the strength of gold’s recovery after it fell to below US$1,140 an ounce last week, with the fall being met with strong fund buying.

“Everyone was waiting for that correction, and the way gold recovered suggested there was a lot of buying lurking in the wings (among) people who missed the opportunity to get into the market in the first place,” said Mr. Hansen.

U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange also hit a record US$1,200.50 an ounce and were later up US$9.40 at US$1,191.70.

The dollar index, which tracks the U.S. currency’s performance against a basket of six others, fell on Tuesday as more clarity about Dubai’s debt situation eased some concerns over the region’s stability, lifting risk appetite.

The dollar also pared gains against the yen after comments from the Bank of Japan on monetary policy.

Weakness in the U.S. unit boosts gold’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Other commodity prices also firmed on the back of the weaker dollar, with base metals firming and oil rising more than half a percent to nearly US$78 a barrel.

Gold tends to track crude prices, as the metal can be bought as a hedge against oil-led inflation.

Elsewhere the world’s biggest gold miner, Barrick Gold Corp., said on Tuesday it has completed the elimination of all of its gold hedges as planned. De-hedging has represented a significant source of demand in recent years.

During times of weak prices, gold miners often sell a portion of their future production to protect, or hedge, against the possibility that prices will fall.

When prices rise, as they have done since 2001, the company suffers because the value of the future production it has sold does not increase with the gold price.

In the physical market, the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings rose 2.134 tonnes to 1,129.994 tonnes as of Nov. 30.

Indian gold off take abated on Tuesday as prices resumed their upward trend, after a modest pick-up in recent sessions when traders stocked up ahead of wedding demand.

Sales of scrap persisted in other parts of Asia on Tuesday, cutting premiums, dealers said.

Analysts say they expect the gold market to continue taking support from fund and other investment demand, and further buying from central banks.

News in early November that India’s central bank had bought 200 tonnes of gold, followed by acquisitions by Russia, Sri Lanka and Mauritius, sparked a 13% price rise that month.

“We expect to see further announcements of Central Bank gold purchases over the coming months as these banks realign their U.S. dollar and other asset holdings,” said Fairfax analyst John Meyer in a note.

On the supply side, Harmony Gold Mining Co., the world’s No. 5 gold miner, said output was suspended at a South African shaft on Tuesday after a fatality.

Among other precious metals, spot silver was bid at US$18.64 an ounce against US$18.45.

Platinum was at US$1,465.50 an ounce against US$1,452, while palladium was at US$376.50 against US$363.50, having earlier touched a high of US$379 an ounce, its firmest since August 2008.

There will be profit taking days in the days to come, but I hope that you will limit those to gold and silver stocks only. Physical gold and silver should be held as the insurance that it is. This is just the beginning for the headline: New Record Gold Price!

Till next time, good luck and good trading!