Gold: Is It Really Near a Record?
Source: Mineweb.com (11/9/07)
With gold grabbing the headlines in the "lay" press as well as the specialist publications and law-abiding analysts being buttonholed by their mates about whether it's now a "buy", it is perfectly arguable that the market is topping out. While this is unlikely actually to be the case this time, there is clear scope for a correction, as speculative froth needs to be blown off the market.
Gold has gained 28% between the recent intermediate low fix of $653.00 on the morning of the 17th August and the pm fix of $841.10 on 7th November. This increase is in dollar terms rises in a selection of other currencies have been as follows (taking the low pm fix, 21st August, through to the pm fix of 8th November). The gain in yen terms was 26%, while the gain in Australian dollar terms was a mere 10%, as the Australian dollar been benefiting from commodity strength (although the recent hike in Aussie interest rates may also have helped here)...
Furthermore in inflation-adjusted terms, gold is nowhere near an all-time high. This can be looked at in two ways; either, what would $850 in January 1980 be equivalent to today; or, to what would the pm fix of 8th November of $841.10 be equivalent in January 1980?