Gold roars to all-time high for fifth straight session

[Turborama]

Source: Reuters

By Lewa Pardomuan

SINGAPORE | Thu Apr 21, 2011 1:26am EDT
- Bullion powered to a lifetime high for a fifth consecutive session on Thursday on a sharply weaker dollar, while lingering tensions in the Arab world, worries about the euro zone crisis and U.S. fiscal health offered additional support.

Silver roared to its highest in more than three decades as it tracked a rally in gold, which was also spurred by a threat of a downgrade to the United States' triple-A credit rating. The gold-silver ratio -- the number of silver ounces needed to buy an ounce of gold -- was at its lowest since 1983.

Spot gold rose to a record high of $1,508 an ounce and stood at $1,505.86 an ounce by 12:31 a.m. EDT, up $7.71 an ounce. U.S. gold futures also hit a lifetime high at $1,508.9 an ounce.

"The U.S. effectively lost its triple-A rating in the eyes of investors that really matter quite some time ago, back when gold broke $1,000 an ounce," said Fat Prophets commodities analyst David Lennox.

Read more: http://www.reuters.com/article/2011/04/21/us-markets-precious-idUSTRE73786N20110421?feedType=RSS&feedName=topNews&WT.tsrc=Social%20Media&WT.z_smid=twtr-reuters_TopNews&WT.z_smid_dest=Twitter

[SkyDaddy7]

1. I wonder if this is a big bubble getting ready to go POP!?! nt.

[n2doc]

4. yep. Look at the charts

Silver too. Classic bubble blowup.

[Art_from_Ark]

8. Charts don't really mean anything when it comes to gold

The reasons for this run-up are totally different from the tech stock and housing bubbles. And gold is only up 25% in the past year. That hardly seems like a bubble.

Silver may be a different story. It has more than doubled in the past year.

[n2doc]

9. Believe that if you wish. I personally wouldn't touch either one right now. n/t

[Art_from_Ark]

10. Gold is a world market

It has a lot of big players who don't care a fig about charts. Silver, on the other hand, does not have the same sort of global appeal and is being driven up by a different set of players.

Silver has jumped up from $17 a year ago to more than $45 today. I think that is a bubble. Gold is only up by a fraction of that proportion. Two different markets.

I personally would not be buying either type of bullion at these prices. However. I might be looking for collector coins which are selling for little more than their bullion price right now but which can hold up their value better in a falling bullion market.

[Turborama]

16. Is now a good time to sell 1 ounce gold Krugerands?

Or is it better to hang onto them?

I was given one as a graduation present by my grandfather and I have been thinking about selling it and investing the money in an education trust fund for my soon to be born child.

[Art_from_Ark]

17. That's a good question

You could cash it in for some pretty good money right now, for sure-- close to $1500, although Krugerrands have been selling at a discount to other gold bullion coins recently, so it might be a bit less than that. The problems is, after you have the cash, there aren't too many ways to make it grow. The last time I looked into an education trust fund, the interest rate was hovering around 1%, which is pathetic.

[Selatius]

2. People are moving their money into gold because they have low faith in the economy.

Gold has traditionally been seen as a safe-harbor investment in times of economic stress. It is when the economy is booming that people diversify out of gold into the wider economy in general.

High energy prices will stoke another round of stagflation, and that will trim the pace of any economic recovery or even reverse it.

[robcon]

3. Inflation is coming.

n/t

[n2doc]

5. Somehow the people buying bonds don't agree n/t

[Recursion]

6. The very rich people piling in to bonds would be surprised if that happens

Not saying it's impossible, but there is a feedback loop here (people willing to buy bonds keep rates down -- of course, if they all flee for some reason they go way up).

[robcon]

7. The price of oil in dollars? Remember stagflation of the late 70's/early 80's?

Inflation is coming, IMO. In other words, the purchasing power of the dollar will be down.

[Recursion]

11. OK, but then "inflation" will mean something different from what it historically has

Calling our current yields "low" is like calling George W. Bush "subpar": it's such an understatement as to lapse into comedy. The yields currently are not just unusually or abnormally low, they are what I can only call "metaphysically" low: people are essentially paying the US Treasury for the privilege of holding bonds.

[Snoutport]

12. Buy their gold now and in a few weeks the bottom drops out and they buy it all back

at a fraction of what they sold it for. Another way for the rich to get more money and leave the middle class holding the (gold) bag.

[cbdo2007]

13. "in a few weeks" - that's what they've been saying for YEARS!!

We've got a few more years to go before the bottom drops out, though we should see some corrections here soon especially in silver.

[Art_from_Ark]

14. Yup, that's what they've been saying for years

Eventually gold will drop for a while. It could be this summer as far as that goes since summer is usually a slow season for gold.

[roamer65]

15. Governments cannot stop their money creation.

They have to keep interest rates very low otherwise interest on their accumlated debt will eat them alive. Cheap money will abound for years to come and we will pay for it with inflation.

[KillCapitalism]

18. If we have a total global economic collapse...

gold and silver will collapse & just become useless metal.

You can't eat gold and silver or use it for fuel.

[vssmith]

19. Could say the same for paper money

[KillCapitalism]

20. Yep, same thing, but...

you can at least use those paper bills for TP when you run out of that. :rofl:

[vssmith]

21. A little coarse