re:new to myg, page-5

From todays pure speculation

At the same time, the market convinced itself it no longer needed the ultimate safe haven. "Gold price hits lowest point in six months" was a typical financial press headline. Then the yellow metal proceeded to confound critics yet again by jumping $US26/oz for the end of year close.

So don't write it off yet. If you want confirmation of gold being the ultimate store of value, then there were some unsourced reports during the week that the reason for gold's fall (apart from the strengthening greenback) was that European banks are being forced to sell the metal in their desperation for cash. What was unsaid was that gold is obviously the only thing they have left that people trust.

Italy, incidentally, has the world's third largest official gold reserves, which are worth about $US140 billion. The country's debt is around $US1.4 trillion.

As Canaccord-BGF analyst Warwick Grigor told clients during the week, it is this use of gold to raise liquidity that explains some of the recent weakness for the metal. But, rather than showing gold's weakness, Grigor says it's a confirmation of gold's strategic value in times of economic crisis.

"The two main currencies of international finance will be the (US dollar) and gold. They will work in tandem because they are interchangeable," he wrote.