Subscribe: RSS Feed | Twitter | Facebook | Email
Home | Contact Us

What is Driving the Gold Market?

Posted by Larry Doyle on May 12, 2010 3:22 PM |

While equities are rebounding nicely today, overall equity volumes remain generally light. That said, there is a bigger development in the markets today. What is it? The shiny yellow stuff is on fire.

Gold is trading close to 1250/oz. and making new highs in the process.

What is driving the gold market? As The Wall Street Journal reports in writing, Gold Prices Extend Climb:

“The gold price is being driven by … the rising concern of the ‘exit strategy’ for central banks given that the ECB is the latest agency to join the (quantitative easing) bandwagon,” JP Morgan analyst Michael Jansen said in a note.

“Indeed, the perceived breach of the ECB’s independence … adds to the view that in the long-term monetary and fiscal authorities will be forced to choose between anemic economic conditions or monetary-driven inflation.”

Anemic economic conditions or monetary-driven inflation? Little wonder why we are witnessing civil unrest in Greece today. What about other Euro-zone nations? What about the UK? The US?


  • TeakWoodKite

    Ha! LD…Inspite of china and the IMF releasing gold in to the market, it still goes up…the 5 year is a sobering chart.

    Then add this…little finace-toid from Cnnmoney;

    The government posted only its third April deficit in the past 30 years, according to data released Wednesday by the Treasury Department.

    It was the 19th consecutive monthly deficit and surpassed the $20.9 billion shortfall last April.

    History repeats itself.
    The stock price of this gold mining company soared relentlessly upward during the entire bear market. Homestake Mining stock rose continuously from $80 in October 1929 to $495 per share in December 1935 – which represents a total return of 519% (excluding cash dividends) during the devastating bear market period.

  • jack

    Both one of the RBS strategists and Dave Rosenberg recently noted that gold is beginning to act as a surrogate currency. Note that gold has decoupled from the rest of the commodity complex. Even if copper or oil declines, gold still goes up. One of the FT blogs today cited a report that shows extensive retail buying of gold in Europe as the citizens no longer believe the Euro is the true successor to the Dmark. You can paper over the cracks (weak pun), but you can not fill them with paper and make it work.

  • Mike

    As far as post financial apocalyptic currencies go, farmland is a better alternative to gold.

  • Ourdad1

    If we are lucky and we vote out the bad in Congress and immediately put a stop (now) to what Gore is calling “American Power” which they did call Cap & Trade and with the right people in we (Americans) suffer while we pay off our debts we can remain a free and democratic country. If not capitalism will eventually die and at the very least will be socialistic. Please wake up friends. Please go out and tell your friends and family to watch what is happening. If you have cable please watch Glenn Beck. If not go online. Find where he is on the radio and listen.

  • Sean

    The “barbaraic relic” is re-assuming its natural and rightful place in human history: real money. Better get some now while you still can.

Recent Posts