Prices are stabilizing in Zimbabwe because people have abandoned their currency and are now using $US, Rand or Sterling for transactions. So if the US keep printing money, the $UD value of all commodities will rise. However, the $AUD is appreciating as the US prints dollars. So there will be a trade-off somewhere along the way. Will the $US gold price rise be larger than the $AUD exchange rate? It depends on the world economy. If general commodity prices don't rise as fast, then the$AUD may not appreciate as fast. Thus we may still have an increase in price. The IMF wants to sell 400 tonnes of gold. They won't do this in one fell swoop. So there is potential for a setback there. But they will sell down slowly over a couple of years. As far as hedge funds go, there are not many operating in the paper gold market any more. They hold physical gold. Also, it is is not easy to get leveraged financing for investing in gold. Too many people burnt on that front (banks too). Most hedge funds that held any long positions sold out in the last quarter of last year. It's been reported in the USA press but not here in Australia. The leveraged funds are out of the game on the sidelines. The physical funds may fluctuate a bit, but most of the buying was from $750 to $850. Most investors are still in the black and will be holding. There is still trouble buying gold coins and silver investment bars in the USA. Physical silver is selling for $3 to $4 above the LME prices due to demand. Hedge funds are still playing with this commodity short selling. These are strange times. And no one has the answers - despite what Krudd and Swandive tell you.
