What is happening with gold? Numerous gold producers see gold reach at least $ US1000 an ounce mark the end of the year – however, the price languishing well below $ US850oz. That said, gold is rising again this week as the U.S. dollar is about to fall further after recent strength. It was the U.S. dollar passes through a dead cat bounce? Well, whatever some people call it is a clear case that the difficult economic situation U.S. is far from over. More bad economic news from the U.S. financial sector is expected by September.
While the consequences high risk and those over U.S. market housing inflation continues to also consider the American consumer is weakening. The U.S. economy remains the largest in the world, and despite the rise and increased Chinese demand for U.S. middle class for consumer products is likely to still be at least 7 times greater than that of China. Stocks in China have also been considerable critical hammering in the last couple of weeks and falling copper prices have been attributed to falling demand for the Asian power. Falls in metals prices have resonated around the world and most notably in Australia with his battered mining sector of day selloffs and volatility in the ASX. As for China, even the most casual observer would realize that an economy based on exports, which brings us back American consumers.
Several reports from the U.S. have confirmed that the sky-high oil prices have weakened consumer spending in recent months. While oil has been declining over the last couple of weeks, the falling dollar will start to rise again as oil oil is linked to the U.S. currency. While no one claims to have a crystal ball on these issues, the history of the major investment bank Goldman Sachs, deserves special mention. Goldman Sachs not only survive the 1929 crisis stock market, but also escaped most of the shakedown of high risk, who started the year past.
Four Goldman Sachs last week was reported by Reuters as saying the price of oil hit $ US149 a barrel by the end year. If the prediction in fact the impact on U.S. consumer will be generalized. But we must also consider why Goldman Sachs made this call. The bank Investment made an effort to say he had more than the price of oil behind the relationship with the U.S. dollar. However, that does not mean that these other factors are as important as the U.S. dollar. This interpretation means that the U.S. dollar is likely to be subject to a substantial devaluation in the next months. What will make this fall? All we can do is to speculate until the bad economic news is released. Now let's reconsider the price of gold. His recent fall was unexpected as gold has remained true during periods of past inflation. If the official national figures accurately reflect the inflation or not, should not be no doubt that prices of food, fuel and living have increased dramatically this year.
If Goldman Sachs is dramatically increasing oil in the future what can banks with massive participation in gold bullion, seen on the way? Arbitrage markets is nothing new and should not be discarded. If a consortium of interests came together and dumped gold in the market that could drive prices well below If the syndicate knew of impending bad financial news that might begin to gradually buy gold again before the news reaches to the current massive gain. Both gold and oil have recently fallen in tandem, in fact, Gold has fallen even faster than oil.
The volatility of gold and oil can not be ignored, but investors should not lose sight the fundamental reasons that drive long-term growth of these key commodities. America is in a bear market and there is no clear skies on the horizon. Now could be a good time to make long-term work on the price of gold, which is likely to increase, due to its value as a hedge against the currencies of Fiat in decline, as the U.S. dollar. If you need proof all you have to do is draw the gold price against U.S. dollar since the creation of the Federal Reserve Bank in 1913, or since President Nixon killed the gold currency hedge in 1971.
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RandGold Resources Mining Company CEO Optimistic of Future Rising Gold Prices – Sept 2009
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