Gold Trades at $1,000 an Ounce in New York on Demand for Haven

[Sapiens]

http://www.bloomberg.com/apps/news?p....rE&refer=home

March 13 (Bloomberg) -- Gold traded at $1,000 an ounce in New York and rose to a record in London on speculation credit- market turmoil will spur demand for the metal as a haven from declines in stocks and the dollar.

Silver, platinum and palladium also advanced as the dollar fell below 100 yen for the first time since 1995 and to a record low against the euro after a Carlyle Group fund moved closer to collapse. Gold climbed 19 percent this year as the dollar fell and world equity markets declined.

``The financial system's in trouble at the moment and people are going to the safety of gold,'' said Mario Innecco, a futures broker at MF Global Ltd. in London. ``You can't create gold so easily as you can create dollars or euros or pounds.''

April futures climbed $15.30, or 1.6 percent, to $995.80 an ounce on the Comex division of the New York Mercantile Exchange after trading at $1,000 for the first time.

Gold for immediate delivery rose $11.15, or 1.1 percent, to $994.08 an ounce as of 12:45 p.m. in London after earlier gaining to $997.67, exceeding the previous all-time high of $992.05 last week.

...

Ben Bernanke may not want to let a major bank fail because that would contract the money supply abruptly, but all his actions will be for naught.

For base capital stay in Gold, Silver, T-Bills and Bonds until the opacity clears away to make sound investments. For speculation capital, commodities should hold until the credit contraction hits Main Street.

-Sapiens

[dbarberic]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

When it closes above $1K, its time to break out the Champaign.

I knew it would happen, I felt it would happen, and the analysis told me it would happen; but to watch it live is almost surreal.

[Mega]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

If you adjust for inflation its got to go to $2500 to hit the 1980 peek.
Mega

[touchring]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Whose "Inflation" figures?

What can you buy in 1980 with $800?

If you adjust for inflation its got to go to $2500 to hit the 1980 peek.
Mega

[North4st]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Whose "Inflation" figures?

What can you buy in 1980 with $800?

Well let see, how about 640 gallons of gas at $1.25 per gallon. Let me see, at today's $3.25 a gallon that makes it equivalent to $2,080.

http://www.1980sflashback.com/1980/Economy.asp

[touchring]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Well let see, how about 640 gallons of gas at $1.25 per gallon. Let me see, at today's $3.25 a gallon that makes it equivalent to $2,080.

http://www.1980sflashback.com/1980/Economy.asp

Thanks, the 1980 comparison is based on the relative difference in gas price in 1980 versus 2007. But what if oil price rise to $300 next year?

[Guest]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Thanks, the 1980 comparison is based on the relative difference in gas price in 1980 versus 2007. But what if oil price rise to $300 next year?

Touchring -

Your a cheery optimistic bloke, aren't you?

[GRG55]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Touchring -

Your a cheery optimistic bloke, aren't you?

Lukester: Did you buy back your silver position?

[touchring]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven



I'm optimistic that the Fed will debase money to save US mortgagees as the alternative is 1930. Print so much money that the debt becomes insignificant.

Touchring -

Your a cheery optimistic bloke, aren't you?

[Guest]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

GRG55 -

What a great question. I read James Dines, and one of his most significant bits of advice to his readers is, if you make a mistake, don't be afraid to go back in and correct it - even quickly, if you have to. You are a mind reader GRG - I spent the entire last night sweating the correct thing to do and called my bank and re-instated half the position, with a trigger finger to add further, last night at 3.00 AM west coast time.

Yes, silver is coming right up on a sickening correction downwards, but the paradox is that those who seek shelter from this new downdraft will outsmart themselves from the benefit of the much larger upside thereafter. From here on out the next couple of years this is "not a normal bull market" in the PM's. What's happening in credit and banking is "big, big, big". We must therefore adopt a forward leaning posture in regard to the precious metals.

Let's have Grapejelly and Charles Mackay and EJ lead the way. These were some of the "early early" gold accumulators. Though I have to say of the above three EJ seems the most skeptical (perhaps "agnostic"is a better word) of bullion's virtues going forward.

Well, I think I'll shut my eyes and follow Grapejelly and Charles Mackay's cues (if I can glean them).

Lukester: Did you buy back your silver position?

[Guest]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

I'm optimistic that the Fed will debase money to save US mortgagees as the alternative is 1930. Print so much money that the debt becomes insignificant.

Touchring -

And our creditors will doubtless be observing our FED's wretched efforts all the way down with growing incredulity. I read comments here about America's profound capacity for self-regeneration, but the massive repudiation of debts to our creditors casts a stain which does not wash away in a mere five to ten years in the eyes of the world.

If we repudiate current debt loads via permanent massive devaluation we'll carry the stigma for twenty years, and the leadership of the world will be shifted elsewhere no matter what ensues thereafter. A deadbeat is a deadbeat - when it comes down to the repayment of debts incurred. No-one will listen to them with the same conviction thereafter, for a good long while.

[GRG55]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

GRG55 -

What a great question. I read James Dines, and one of his most significant bits of advice to his readers is, if you make a mistake, don't be afraid to go back in and correct it - even quickly, if you have to. You are a mind reader GRG - I spent the entire last night sweating the correct thing to do and called my bank and re-instated half the position, with a trigger finger to add further, last night at 3.00 AM west coast time.

Yes, silver is coming right up on a sickening correction downwards, but the paradox is that those who seek shelter from this new downdraft will outsmart themselves from the benefit of the much larger upside thereafter. From here on out the next couple of years this is "not a normal bull market" in the PM's. What's happening in credit and banking is "big, big, big". We must therefore adopt a forward leaning posture in regard to the precious metals.

Let's have Grapejelly and Charles Mackay and EJ lead the way. These were some of the "early early" gold accumulators. Though I have to say of the above three EJ seems the most skeptical (perhaps "agnostic"is a better word) of bullion's virtues going forward.

Well, I think I'll shut my eyes and follow Grapejelly and Charles Mackay's cues (if I can glean them).

I am not much of a chart reader as you know, but silver was looking pretty lofty, and the Au/Ag ratio was at a bit of a near term extreme.

Truth be told, I peeled off a small bit of my silver position too, but lacking courage to be in cash, I bought some more gold and palladium with the money - on the thesis that they were comparatively cheaper. However a serious correction across the metals cannot be ruled out, as remote as that may seem in light of today's action. EJ's agnostic approach to all and any investment is healthy in my view - however, he made a clear and timely "stay with your gold" call a very short time ago.

[Guest]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Poor Silver .. the Rodney Dangerfield of the metals ... can't get any respect. ... :rolleyes:

[touchring]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Touchring -

And our creditors will doubtless be observing our FED's wretched efforts all the way down with growing incredulity. I read comments here about America's profound capacity for self-regeneration, but the massive repudiation of debts to our creditors casts a stain which does not wash away in a mere five to ten years in the eyes of the world.

If we repudiate current debt loads via permanent massive devaluation we'll carry the stigma for twenty years, and the leadership of the world will be shifted elsewhere no matter what ensues thereafter. A deadbeat is a deadbeat - when it comes down to the repayment of debts incurred. No-one will listen to them with the same conviction thereafter, for a good long while.

I think the Fed is doing the right thing by debasing the dollar. There are several good things that can happen:

1). Improve competitiveness of US exporters. Thus offsetting the unemployment caused by housing recession.

2). Devalue the buying power of SWFs and national reserves - this will reduce the amount of resources BRIC can buy in Africa and elsewhere.

3). Reduce the debt burden (both internal and external debt).

4). Cause inflation in emerging economies and force them to revalue their currency.

5). Reduce world population by starvation (this objective is not discussed openly).

As for credibility - still worthwhile to save?

[Guest]

Re: Gold Trades at $1,000 an Ounce in New York on Demand for Haven

Touchring -

You forgot to add item # 6, a flight from, or a run on the USD. This would lead effectively to the invalidation of your points 1-5.

The effects 1-5 are "one time" effects, like a shot in the arm - works great for a little while, then wears off as all the above dollar denominated entities migrate a good part of their present USD denominated exposure to currencies or stores of value other than the USD. Then the effect is gone, and that card is no longer available to play.

Dollar devaluation is a "one trick pony" with a strictly limited term of effectiveness. However I take your point, it's certainly better as a shock absorber than nothing at all.

Jack Crook's World Currency Alert sees heightening, rather than bottoming risks to the USD in March of this year and going forward. Because it's "down so far" contrarians sniff an opportunity to go long the dollar ahead of the crowd. Not so fast says Crooks - there is an increasing risk of an abrupt all-out run on the dollar instead.

<< Fed Chairman Ben Bernanke has made it clear that he plans to sacrifice inflation concerns in favor of economic growth concerns. By continuing to push the Fed Funds rate lower and doing all he can to flood the financial system with dollar liquidity in an attempt to stem the rising tide of credit crunch, he may be setting the stage for a real dollar crisis. I don’t think we’ve yet reached that stage, and I hope we don’t. But it’s becoming an increasingly nasty environment for the U.S. dollar. An extreme downshift in sentiment could lead to a dangerous, self-feeding, downward spiral in the buck. >>