Is anyone else out there becoming more and more uptight with the media reporting that gold is moving up in response to 'war talk'?
The recent sustained highs are simply a result of the decline in value of the US$ relative to other major currencies such as the euro.
The other night when the POG leaped $6.00, the USD dropped to new recent lows against the euro.
Looking at the trend for particularly the last few months, but also the last year, it is easy enough to pick relationships between the euro $, US$ and the POG.
If war does not eventuate, or seems unlikely, the POG may initially be hit, but in the long term, it will continue its' trend.
Put simply, there is still a lot of rot to be exposed in the US economy.
I maintain the US is in for a time not dissimilar to the Jap economy of the past ten or so years.
The US is printing money now because they can't cut interest rates much further!
With an extra trillion here and an extra trillion there in tax cuts, the government is intentionally devaluing the US currency and the POG is the major beneficiary.
If a long, drawn out war does eventuate, it will only serve to add to the fortune of the POG.
The trend is there, and the moves gold has made in the past year, have been exceptional.
With certain targets being met and held, the POG is attracting investor interest, not seen for decades.
I've decided to shy away from listed companies for exposure. Investing in the NYMEX options and futures market offers no uncertainty about company management, no uncertainty about hedging situations, and offers only minimal currency risk. And any currency risk is likely to be positive for the POG anyway.
The question now becomes, how high must gold go before silver is ignited?
