...So the US dollar looks set to keep falling, and the Australian dollar and gold to keep rising, although the unprecedented long positions in gold at the moment suggest that a technical correction may be imminent.
Bullion-based exchange traded funds (ETFs) now hold about 1,300 tonnes of gold and are buying several tonnes every day to keep up with retail investment demand.
There was an interesting comment this morning by the manager of some currency-related mutual funds in the US, Axel Merk, who is betting against the US dollar at the moment. He pointed out that gold is a small market compared to equities and bonds, and that any flight into bullion has a big impact on the price, and could push it to “stratospheric� levels.
Other gold bulls are pointing out that in real terms – inflation adjusted – gold is only about half its 1980 peak (which is $US2079, according to London precious metals research house, GMFS)....
AXM Price at posting:
4.9¢ Sentiment: None Disclosure: Held
