Gold: Is It Really Near a Record?

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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.

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. Many market observers expect the spot price to challenge the historical high within a matter of days. The record high fix was $850 on 21st January 1980, although the intraday high was closer to $875...

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?

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